Chinese investment in Canadian property could be about to take a nosedive. That’s because, according to a recent survey, new regulations are making many would-be buyers think twice about getting into the Canadian housing market.
Last August, the Chinese government implemented new rules aimed at curbing foreign investment. Now, a new survey by commercial realtor Cushman & Wakefield has found that Chinese investors are having a harder time securing foreign property deals in 2018.
Nearly half of the Chinese investors surveyed found it “extremely difficult” to make acquisitions, while 10 per cent said it was “impossible.”
Those findings are backed up by the latest research from the University of Alberta China Institute, which has found that the value of major Chinese investments in Canadian real estate is becoming smaller.
In 2016, major investments were worth $3.05 billion — in 2017 they totaled just $1.47 billion.
In a statement, University of Alberta China Institute director Gordon Houlden writes that there’s been a “clear decrease” in investment, as “regulations do have an effect.”
But the rules are largely centred around large transactions, such as stopping state-owned enterprises from investing more than $1-billion in foreign real estate. It’s unlikely they will stop Chinese investors looking to buy smaller properties from entering the Canadian market.
In fact, according to a survey from Chinese real estate website Juwai.com, Canada is the third most popular investment location for Chinese investors in 2018.
“Over the past few years, we have seen changes in the primary motivations of new Chinese property buyers,” writes Juwai.com CEO Carrie Law, in a statement. “‘Own’ surpassed ‘investment’ in 2016 and hasn’t looked back. Now, buying for one’s own use motivates more than 65 per cent of Chinese buyers.”
Toronto was listed as the number one Canadian city of interest, followed by Montreal, Vancouver, Ottawa and Calgary.