Chinese inquiries in Toronto, Montreal, Calgary real estate spiked with Vancouver tax
Inquiries from China for property in several big Canadian markets spiked in the months after Vancouver introduced its tax for foreign buyers, according to a report based on data from a top Chinese foreign property website.
The report, released Tuesday by Sotheby’s International Realty Canada in conjunction with Juwai.com, said Chinese inquiries for listings in the Vancouver market slumped by 81 per cent year over year in July 2016, the month the 15 per cent tax was announced.
Juwai.com is a Chinese website visible both inside and outside of that country. According to a Sotheby’s spokesperson, the portal has reported that two million Chinese consumers visit the site monthly.
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The drop in interest in Vancouver properties continued through the rest of 2016, with a year-over-year tumble of 78 per cent in August, followed by dips of 26 per cent, 29 per cent, nine per cent and 37 per cent in September, October, November and December, respectively.
The report says interest from prospective real estate purchasers on Juwai.com immediately shifted into other Canadian markets following the tax’s implementation.
Property inquiries shot up by 1,050 per cent and 420 per cent year over year in Calgary during August and September, respectively. Searches of the Toronto market rose 62 per cent year over year in August and 72 per cent in September. In Montreal, there was a dip in August, before a resurgence of 152 per cent year over year in September.
Despite that interest, Sotheby’s said it didn’t translate into higher sales activity in Calgary, Toronto and Montreal.
“Further, Juwai.com property enquiry growth trends leveled off towards the end of 2016, as new awareness of the tax was absorbed by potential real estate consumers,” Sotheby’s said.
Sotheby’s International Realty Canada said it anticipates long-term interest from potential buyers seeking investment properties may shift away from Vancouver, but added that the majority of foreign buyers seeking properties for personal use will not make “reactionary choices” because of Vancouver’s new tax.
Education on top
The top motivation cited by potential property buyers from China when they searched for properties in Toronto, Vancouver and Montreal was education, cited by 41 per cent, 44 pre cent and 46 per cent of enquirers, respectively.
In the Calgary market, the highest motivation for inquiries through Juwai.com was “own use,” at 62 per cent, which could represent a potential buyer searching for a second or third home. That reason was the top motivation for 37 per cent of inquiries in Toronto, 25 per cent in Vancouver and 34 per cent in Montreal.
Investment was cited by approximately one-quarter of people searching on Juwai.com for property in the four markets.
Only a small segment of people cited immigration as a key motivation for their search, at 14 per cent, three per cent, 13 per cent and 10 per cent of those inquiring in Vancouver, Calgary, Toronto and Montreal, respectively.