Real Estate

Why Chinese will be pouring money into real estate

  • Last Updated:
  • May 25th, 2019 3:03 pm
[OP]
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Dec 13, 2016
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Why Chinese will be pouring money into real estate

This is gonna be short, so you are welcome to downvote.


In a nutshell, Chinese buyer is no different from Canadian. They are humans and are perfectly aware of ridiculous ratios that exist in certain cities. However, they are in desperate need to get the money out from the reach of Chinese government hence they will overpay for real estate and often buy them sight unseen. No, they will not be the first to bail if the real estate shows any weakness, as a matter of fact they will keep their properties long after the average Canadian sold at a loss.

Many uneducated bears will scream that this is dirty money, but let me ask you this. If Canadian government is to impose a 90% on your savings would you still keep the money in Canadian banks or would you move it overseas? Does Canadian money then become dirty money? No, there are not that many Chinese buyers in Canada, but they will skew the averages by overpaying for certain properties.



Discuss!
70 replies
Newbie
Mar 3, 2011
41 posts
12 upvotes
Ottawa
I hope I'm not being stereotypical/racist/etc. but I think there are 3 (maybe more) factors influencing this.

From what I've seen, Chinese and Asians are more conservative in their general daily life, including investment. Yes, RE can go up and down just like the stock market, but overall they are more stable (during the past few decades).

Not to mention, Chinese and Asians, the more traditional ones, would have multiple generation living in the same roof. Thus, there is more money available for them to invest/purchase more RE in other countries.

And 3, part of it is what you mention, in that there is no doubt they are trying to invest in other countries to avoid their own government for capital gains.
Deal Addict
Dec 30, 2012
1098 posts
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Toronto
Can you explain why West Vancouver - ground zero for luxury properties bought by overseas money - is down 30% yoy and sales volume at levels last seen before many of us were born?
Deal Fanatic
Feb 22, 2011
9733 posts
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Toronto
civiclease wrote: Can you explain why West Vancouver - ground zero for luxury properties bought by overseas money - is down 30% yoy and sales volume at levels last seen before many of us were born?
NDP, destroying economies for 30 years
Deal Addict
Dec 30, 2012
1098 posts
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Toronto
mazerbeaner wrote: NDP, destroying economies for 30 years
But GreyHyundai just told us that Chinese investors won’t sell at the first sign of weakness.
Deal Fanatic
Feb 22, 2011
9733 posts
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Toronto
civiclease wrote: But GreyHyundai just told us that Chinese investors won’t sell at the first sign of weakness.
First sign of weakness? No.

Elect socialists? Yes.
Member
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Jan 7, 2019
313 posts
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While this may be the unpopular opinion, I do agree with OP. In China, for $1million (CAD) equivalent, you can "lease" a property from the government for 70 years or something.

In Canada, for $1million CAD, you can buy a detached property and pass it down from generation to generation.

Not to mention, size, location, air quality, quality of life, etc. is much better here. This to me, has been a no-brainer and a lot of relatives of mine have been buying real estate in the Toronto market. 15% Foreign buyer's tax is nothing for them.

Just FYI, for property in Beijing, depending on which circle band you are in, (1st, 2nd, 3rd etc.) a small 400sq feet apartment will cost upwards of $1million - $2million CAD. Many chinese people own more than 1 unit....sell one of those...buy a giant 4000sq feet house?.....Easy.
Remember to always Thumbs Up good responses! Spread positively.
Deal Addict
Dec 30, 2012
1098 posts
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Toronto
mazerbeaner wrote: First sign of weakness? No.

Elect socialists? Yes.
I see. So the rule is “Chinese never sell...unless you elect a left-wing government”?
Deal Fanatic
Feb 22, 2011
9733 posts
11987 upvotes
Toronto
civiclease wrote: I see. So the rule is “Chinese never sell...unless you elect a left-wing government”?
Not any left-wing government, just crazy socialists who put up a finance minister who has 0 education or experience in finance. You can expect the consequences to last for decades. Not just in the housing market but their entire economy will be impacted. They are already look to relieve gas prices... even though they added taxes to increase prices lol, complete and utter idiots.

We are still paying some 10% bonds that Rae took on in the 90s, never again NDP in Ontario.
Deal Addict
Jan 14, 2009
2156 posts
1207 upvotes
Vancouver, BC
mazerbeaner wrote: First sign of weakness? No.

Elect socialists? Yes.
LOL the Chinese are smart. It's always good to diversify and have a backup plan because in Canada you never know when socialists will get elected and how long they'll stay, just look at Ontario.
Deal Fanatic
Feb 22, 2011
9733 posts
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Toronto
zakarydoks wrote: LOL the Chinese are smart. It's always good to diversify and have a backup plan because in Canada you never know when socialists will get elected and how long they'll stay, just look at Ontario.
It's nice in Ontario now, everything is getting back on track. Come fall and everything will be right again.
Deal Addict
Dec 30, 2012
1098 posts
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Toronto
mazerbeaner wrote: Not any left-wing government, just crazy socialists who put up a finance minister who has 0 education or experience in finance. You can expect the consequences to last for decades. Not just in the housing market but their entire economy will be impacted. They are already look to relieve gas prices... even though they added taxes to increase prices lol, complete and utter idiots.

We are still paying some 10% bonds that Rae took on in the 90s, never again NDP in Ontario.
But why would Chinese buyers care about any of that? The OP just told us that the Chinese government will take 90% of their wealth.

Why would they care that a left wing government causes their RE and the economy to decline? Surely repatriating that money to China would be worse? Or did they all pack up and buy in Ontario?

Considering many commentators here are Chinese nationals, perhaps that can tell us if they know of any relatives who sold in BC and bought in Ontario recently.
Deal Fanatic
Feb 22, 2011
9733 posts
11987 upvotes
Toronto
civiclease wrote: But why would Chinese buyers care about any of that? The OP just told us that the Chinese government will take 90% of their wealth.

Why would they care that a left wing government causes their RE and the economy to decline? Surely repatriating that money to China would be worse? Or did they all pack up and buy in Ontario?

Considering many commentators here are Chinese nationals, perhaps that can tell us if they know of any relatives who sold in BC and bought in Ontario recently.
Why are you assuming it is Chinese people selling there? It could be anyone. Do you have a sale breakdown by race?
Sr. Member
Sep 14, 2007
895 posts
306 upvotes
BrokeMillennial wrote: Not to mention, size, location, air quality, quality of life, etc. is much better here.
I would add that cultural acceptance is a huge thing for Toronto/Vancouver. There are still parts of Canada that see very few foreigners and are quite racist.
The big cities already have huge communities of ethnicities that makes it easier for foreigners to make the transition, as well as being treated more equally by locals. We may not be the largest tech hub, financial sector, economic power, media influential centre on a global scale, but cultural diversity and acceptance, we're definitely up there with Australia.
Deal Addict
Dec 30, 2012
1098 posts
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Toronto
mazerbeaner wrote: Why are you assuming it is Chinese people selling there? It could be anyone. Do you have a sale breakdown by race?
Well for starters, the 2011 census showed 20% Chinese descent among West Vancouver, almost certainly higher today. At least 1/10 homes in the city owned by foreign buyers - https://www.nsnews.com/real-estate/one- ... 1.23789191. If they aren’t the only sellers, they’re certainly a sizeable proportion. How do I know the foreigners are mostly Chinese? I don’t. But it’s a bit like saying I’m not 100% sure most illegals to the US are Mexican.

Or we could use Richmond BC as a better example. 50% Chinese. Tanking property market.

Either way I don’t see much evidence of this alleged superior Chinese real estate savvy.
Deal Guru
Feb 9, 2009
10838 posts
9237 upvotes
stryder1587 wrote: I would add that cultural acceptance is a huge thing for Toronto/Vancouver. There are still parts of Canada that see very few foreigners and are quite racist.
The big cities already have huge communities of ethnicities that makes it easier for foreigners to make the transition, as well as being treated more equally by locals. We may not be the largest tech hub, financial sector, economic power, media influential centre on a global scale, but cultural diversity and acceptance, we're definitely up there with Australia.
I would say Canada is even more accepting than Australia which is still quite a racist country.

Canada is too... every country is. But in Toronto since there is so much multiculturalism (one of the most diverse cities on Earth) so that attracts everyone from asians, africans, south americans, etc. indians, chinese, koreans, etc. If your leaving your land to start fresh your probably not moving to little rock, arkansas...
[OP]
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Dec 13, 2016
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civiclease wrote: Can you explain why West Vancouver - ground zero for luxury properties bought by overseas money - is down 30% yoy and sales volume at levels last seen before many of us were born?

I never mentioned anything about Vancouver or even Canada. I even said that Chinese are not dumb and will obviously buy where there is better value. As of now that is Toronto.

You do like to cherry pick.
Member
Mar 18, 2015
220 posts
176 upvotes
Mississauga, ON
civiclease wrote: Can you explain why West Vancouver - ground zero for luxury properties bought by overseas money - is down 30% yoy and sales volume at levels last seen before many of us were born?
Because properties worth buying have been sold and the Chinese buyers aren't selling?
A racial breakdown of the buyers/sellers would be a nice piece of data, but I don't think we keep those around. The city should have people's names on property tax files and you could guess if the buyer/seller is Chinese, but that's not publicly accessible.
Deal Addict
Dec 30, 2012
1098 posts
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Toronto
BiegeToyota wrote: I never mentioned anything about Vancouver or even Canada. I even said that Chinese are not dumb and will obviously buy where there is better value. As of now that is Toronto.

You do like to cherry pick.
You call it cherry picking but how else can one empirically assess the merits of your post without analyzing specific places where Chinese represent a huge proportion of the population?
[OP]
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Dec 13, 2016
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civiclease wrote: Well for starters, the 2011 census showed 20% Chinese descent among West Vancouver, almost certainly higher today. At least 1/10 homes in the city owned by foreign buyers - https://www.nsnews.com/real-estate/one- ... 1.23789191. If they aren’t the only sellers, they’re certainly a sizeable proportion. How do I know the foreigners are mostly Chinese? I don’t. But it’s a bit like saying I’m not 100% sure most illegals to the US are Mexican.

Or we could use Richmond BC as a better example. 50% Chinese. Tanking property market.

Either way I don’t see much evidence of this alleged superior Chinese real estate savvy.
The thread is not about falling Vancouver real estate due to treacherous government. The thread is about Chinese buying properties anywhere they can get their hands on.

Here, educate yourself beyond boring Canadian articles:

https://www.scmp.com/week-asia/society/ ... ney-abroad


"Middle class Chinese".

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