Chinese Buyers Say They Want Toronto Real Estate For Schooling
Foreign Buyers continue to drive the Canadian Housing market and though many believe the cause of that is purely investment, its actually not. In fact most of foreign clients are coming to Toronto for educational and business opportunities, not just to park their money offshore. Below are the various reasons and statistics why foreign buyers want to come to Canada.
"The top reason why foreign buyers from China want to get into the Canadian housing market is education, not investment, according to data from a popular global real estate listings website.
Figures released Tuesday by the Chinese website Juwai.com in partnership with Sotheby's International Realty Canada found that schooling was the primary motivation for potential Chinese homebuyers who viewed property listings in major Canadian cities in 2016.
It found that housing needed for educational purposes was the most cited reason why 46 per cent of Chinese users were looking at properties in Montreal, followed by 44 per cent in Vancouver, 41 per cent in Toronto and nine per cent in Calgary.
The second most common motivator for the interested homebuyers was "own use," which could mean the home would be used as a second or third property. Sixty-two per cent of those looking for homes in Calgary cited this was their main reason, followed by 37 per cent for Toronto, 25 per cent for Vancouver and 34 per cent for Montreal.
Investment wasn't the top reason listed by a quarter of home seekers, with 27 per cent saying it was the main reason for their property searches in Vancouver and Toronto, 23 per cent in Montreal and 21 per cent in Calgary.
Brad Henderson, president at Sotheby's International Realty Canada, says the figures show that there have been misconceptions about why Chinese homebuyers look to Canadian real estate.
"I really think a lot of perception that people have around foreign buyers and specifically buyers from mainland China are informed by more anecdotal information and not statistics," he said.
The data also indicated that the majority of Chinese property searches were for Canadian homes priced below $655,050.
"While home buyers from mainland China have been identified as a notable segment of foreign purchases within the luxury property markets of Vancouver and Toronto, Juwai.com data dispels the assumption that Chinese interest is limited to the high-end segment," said the report.
"Instead, it implies that conventional real estate dominates demand."
The figures also found that the implementation of a 15 per cent foreign-buyers tax last August in Vancouver had a swift impact on the interest of those searching for Canadian properties.
Juwai.com says that immediately following the announcement of the tax in July, its listing inquiries for Vancouver plummeted 81 per cent year-over-year and 78 per cent in August year-over-year when the tax came into effect.
It also saw that listing searches increased in other Canadian cities, with property inquiries soaring 1050 per cent and 420 per cent year-over-year in Calgary during August and September, and rising 62 per cent and 72 per cent year-over-year in August and September in Toronto.
Montreal saw a small decline of four per cent year-over-year in August before gaining 152 per cent year-over-year in September.
Even so, Henderson says he anticipates the number of Vancouver searches to pick up again, citing a modest increase in the number of inquiries in the last quarter of 2016 which he attributed to prospective buyers having digested the impact of the foreign-buyers tax.
"So we believe that in 2017, we'll probably see an increased interest in properties in Vancouver."
The data also found that Canada ranked third by users as the most popular destination for international homebuying, after the United States and Australia.
Juwai.com says the data was compiled over the course of 2016 from its more than two million monthly Chinese visitors.