The tight rules that have been set by the new administrative government of China on money exchange are likely to have a domino effect on the foreigner-dependent housing sector in Canada. A news reporting site stated that as of this month, any conversion of yuan and time for when the money will be used will require documents to be provided by the mainland authorities. There will be heavy precaution if the converted funds are used for any illegal means, for instance, buying any residential property. One of the stiff penalties includes being forbidden from exchanging cash for a momentous period.
The regulatory which are stricter stands for the peak of the work the Chinese authorities has been putting to have the outbound flow of cash controlled, which specialist mentioned has caused the government’s foreign reserves to enormously dwindle over the recent years.
A warning was issued by Andy Xie, an economist, saying that the regulatory correction will cause the housing markets that is depending on money from outside (the likes of Canada) to face a sharp decline; a deadly scheme when one of the country’s one-time blazing cities (Vancouver) has come to a high point of sales volume and spiking prices in spring 2016.
It will be a while before the impacts of the current development become obvious according to the president of the Real Estate Board, Dan Morrison. He stated; “There are so many factors in the housing market. Vancouver is not a homogeneous market. Some people want to point to one easy problem or one easy solution, and there is no such thing.”