{"id":1346,"date":"2016-03-24T15:15:20","date_gmt":"2016-03-24T22:15:20","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=1346"},"modified":"2016-03-24T12:12:31","modified_gmt":"2016-03-24T19:12:31","slug":"how-much-chinese-investors-may-be-spending-on-toronto-vancouver-real-estate","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2016\/03\/how-much-chinese-investors-may-be-spending-on-toronto-vancouver-real-estate\/","title":{"rendered":"How Much Chinese Investors May Be Spending on Toronto &#038; Vancouver Real Estate"},"content":{"rendered":"<p style=\"text-align: justify;\">It\u2019s the million-dollar question. Or maybe, as National Bank economist Peter Routledge suggests, it\u2019s a multi-billion-dollar question.<\/p>\n<p style=\"text-align: justify;\">Just how active are foreign investors in the blistering Toronto and Vancouver housing markets?<\/p>\n<p style=\"text-align: justify;\">Last year, home buyers from China spent $12.7 billion on residential real estate in Vancouver, or 33 per cent of overall sales volume, and $9 billion in Toronto\u2019s market, or 14% of the total invested in real estate there, according to Routledge\u2019s estimates.<\/p>\n<p style=\"text-align: justify;\">Citing a lack of Canadian data, Routledge used US numbers from the stateside National Association of Realtors (NAR) alongside a Financial Times survey to get a sense of what foreign investment levels north of the border might look like.<\/p>\n<p style=\"text-align: justify;\">For the National Bank estimate, Routledge zeroed in on Chinese investors \u201csince anecdotal evidence suggests that the capital inflows most prominently influencing Toronto and Vancouver housing valuations come from mainland China.\u201d<\/p>\n<p style=\"text-align: justify;\">According to NAR\u2019s latest annual Profile of International Home Buying Activity, which includes its own estimates on how much foreign investors are spending in the US residential real estate market, Chinese investment in housing there totalled $28.6 billion in US funds in the year ending in March 2015.<\/p>\n<p style=\"text-align: justify;\">Routledge came to the obvious conclusion that investment in Canada\u2019s two hottest market must be a proportion of this. \u201cThe question is : what proportion,\u201d he writes.<\/p>\n<p style=\"text-align: justify;\">To better gauge this, he then looked at an August 2015 Financial Times survey of 77 high-net-worth and affluent individuals from China \u2014 \u201cNot a statistically significant sample size,\u201d Routledge admits \u2014 which found that of those who bought a house abroad, 33.5% did so in the US, compared to 11.7% and 8.3% in Vancouver and Toronto, respectively.<\/p>\n<p style=\"text-align: justify;\">\u201cFrom this survey data, one could hypothesize that for every four high net worth investors from China who purchase a US residence, one purchases a residence in Toronto; and for every three high net worth investors from China who purchase a US residence, one purchases a residence in Vancouver.\u201d<\/p>\n<p style=\"text-align: justify;\">When these ratios are applied to the total volume of Chinese investment in US real estate according to NAR, Routledge comes up with his estimates for these Canadian markets.<\/p>\n<p style=\"text-align: justify;\">The numbers may appear at odds with figures from the Canada Mortgage and Housing Corporation on foreign condo ownership. According to its 2015 Condominium Apartment Vacancy Survey, 5.8% of condo units in Toronto are foreign-owned, compared to 5.4% in Vancouver. However, Routledge wasn\u2019t caught off guard.<\/p>\n<p style=\"text-align: justify;\">\u201cIn a society as compelling and open to immigration as Canada is, it is not surprising to us that flows of immigrants and foreign capital into the country\u2019s two magnet cities \u2014 Toronto and Vancouver \u2014 influence the local prices of homes,\u201d writes Routledge, listing the country\u2019s multiculturalism, education and healthcare systems, and fluid citizenship process among its draws.<\/p>\n<p style=\"text-align: justify;\">Routledge also has an idea of what may account for the lack of comprehensive data on foreign property ownership in Canada.<\/p>\n<p style=\"text-align: justify;\">\u201cAddressing the influence of this capital flow on local residential real estate valuations can inflame unproductive tensions,\u201d he writes. \u201cThe prospect of unduly exacerbating these tensions may cause some to recoil from studying the issue \u2014 a reaction that, though honest and understandable, we see as unproductive.\u201d<\/p>\n<p style=\"text-align: justify;\">Routledge continued: \u201cSurely one can study the issue of immigration, foreign capital flows, and housing affordability in a manner consistent with the country\u2019s guiding principles regarding immigration and multiculturalism.\u201d<\/p>\n<p style=\"text-align: justify;\">In November 2015, Andy Yan, an urban planner and former roundtable member of the mayor\u2019s housing affordability task force in Vancouver, unintentionally stirred up controversy when he released a report looking into possible foreign ownership numbers in three Vancouver neighbourhoods.<\/p>\n<p style=\"text-align: justify;\">Critics at the time said the report was racist. Yan used non-anglicized Chinese names as an indicator of foreign ownership.<\/p>\n<p style=\"text-align: justify;\">While the federal budget for 2016-2017 shows $500,000 being set aside for Statistics Canada to drill down into the issue further, which Routledge points out is a little over a quarter of the average price of a Vancouver detached home, or \u201ca touch on the low side,\u201d it will be some time before the agency has anything new to show.<\/p>\n<p style=\"text-align: justify;\">So for now, Routledge\u2019s handiwork might provide as good an idea of foreign investment in Canadian real estate as anything else out there.<\/p>\n<p><a href=\"http:\/\/news.buzzbuzzhome.com\/2016\/03\/economist-chinese-investors-toronto-vancouver.html\" target=\"_blank\">This Economist Calculated How Much Chinese Investors May Be Spending on Toronto &amp; Vancouver Real Estate<\/a> by Josh Sherman | Buzz Buzz Home<\/p>\n","protected":false},"excerpt":{"rendered":"<p>It\u2019s the million-dollar question. Or maybe, as National Bank economist Peter Routledge suggests, it\u2019s a multi-billion-dollar question. Just how active are foreign investors in the blistering Toronto and Vancouver housing &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2016\/03\/how-much-chinese-investors-may-be-spending-on-toronto-vancouver-real-estate\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-1346","post","type-post","status-publish","format-standard","hentry","category-real-estate"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How Much Chinese Investors May Be Spending on Toronto &amp; Vancouver Real Estate &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2016\/03\/how-much-chinese-investors-may-be-spending-on-toronto-vancouver-real-estate\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"How Much Chinese Investors May Be Spending on Toronto &amp; Vancouver Real Estate &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"It\u2019s the million-dollar question. 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