Canada a top destination for Chinese buyers

Trails only the U.S., Australia and Hong Kong, website that tracks transactions reports

VANCOUVER — A large Chinese real-estate website claims Chinese investors at home and abroad spent more than $100 billion US on overseas-property investments in 2016.

This is a 25 per cent increase over Juwai.com’s 2015 estimate of $80 billion US.

The website named Canada as one of four top destinations for this record amount of money, after the U.S., Australia and Hong Kong.

The estimate includes purchases made by corporate and individual buyers and is based on the website’s own data as well as industry and government information, according to Juwai, which was started by Australian expatriates in Hong Kong and has offices in Shanghai and Guangzhou.

The Juwai report comes as new data released by the B.C. government shows the total value of property transactions involving foreign buyers in May accounted for 3.1 per cent of the total in Metro Vancouver, and six per cent across B.C.

In Ontario, the provincial government said this week that between April 24 and May 26, 4.9 per cent of homes sold in the so-called Golden Horseshoe region were to foreign buyers.

Some real-estate industry observers say that keeping track of the number of foreign buyers like this doesn’t further understanding of the amount of overseas money flowing into Canadian markets.

They point out that purchases are being made with offshore trusts, shell companies and the use on land titles of proxy names to obscure the identity of beneficiary owners.

In particular, they cite a 2016 Transparency International study that says 50 per cent of the 100 most expensive properties in the City of Vancouver are held by such means.

Others, such as Sotheby’s International Realty Canada CEO Brad Henderson, say that Juwai’s estimate of Chinese buyers spending “$100 billion all over the world, helps to put [their spending] into perspective.”

It’s a milestone to break through the $100-billion mark, but this figure isn’t significant compared with overall Canadian real estate sales, said Henderson. “It is only a very small portion,” he said.

Juwai said that by analyzing what information its users seek, it expects “2017 to be another nearrecord year for Chinese outbound property investment, although flows will likely be lower than in 2016.”

For example, in the first quarter of 2017, Juwai users made fewer inquiries than in the first quarter of 2016, but “almost an identical number of inquiries as in the first quarter of 2015, a year which set a peak only surpassed by last year.”

“Despite its torrid pace of overseas acquisitions in the last decade, China has been buying for such a short period of time that its investors have only accumulated a relatively small stock of overseas property and other foreign assets,” the report said.

Sotheby’s has been working with Juwai “to reach the Chinese market and to compile data on Chinese inquiry trends,” but did not participate in the latest report, Henderson said. “We want to know what buyers are looking for and understand their intentions.”

Sotheby’s isn’t the only realestate company eager to connect more directly with buyers who prefer Chinese-language sources of information online.

West Vancouver-based luxury realtor Malcolm Hasman advertises a connection with Juwai on his website. The realestate arm of American investor Warren 6 Berkshire Hathaway announced a marketing agreement with Juwai in April.