The irresistible charm of owning properties in other countries
Chinese investors are now among the biggest property buyers in the United States, Canada, Australia and Japan. Spooked by continuous Chinese capital inflows into local realty, some countries have even raised foreign ownership thresholds or raised barriers.
In July, Canada’s British Columbia said it would levy an extra 15 percent of property transfer tax on overseas property owners in the Greater Vancouver area.
So far, housing prices at Vancouver, where housing prices rose the fastest globally last year, dropped more than 20 percent in August. Only a fewclients of agencies closed the deals. Many agencies attributed the fall to the newpolicy.
“Some developed countries don’t like excessive speculation in the propertymarket. The hugedemand from Chinese investors has led to a rapid rise in local property prices overseas. It could cause market bubbles and make the economy unstable. Consequently, it’s feared many local residents won’t be able to afford housing,” said Guo Yi, marketing director at Beijing-based Yahao Real Estate Selling and Consulting Solution Agency.
“Besides, many Chinese people bought overseas properties purely for investment purposes. They don’t stay there. This will create problems like delayed payment of water and electricity bills, and property management fee.”
She also said overseas property management companies are strict about prompt fee payments.
Elsewhere, the Australian government said it will restrict overseas investors from buying preowned homes. Foreigners with short-term visas and owning properties will have to sell such realty once the visa expires.
In the United Kingdom, the newly elected mayor of London, Sadiq Khan, warned that if a large number of properties in the capital are bought by overseas buyers for investment purpose, the housing shortage would persist even if thousands of new properties are every year.
Despite such measures and warnings, Chinese investors appear unstoppable.
In the first half of this year, they bought overseas properties worth $16.1 billion, according to data from CBRE Group, a US commercial real estate advisory firm.
Among cities, New York has become the most popular investment destination for Asian investors, replacing London. Among countries, it is the US, attracting 52 percent of outbound Asian capital. built