Chinese Investors Are Expected To Spend $1 Trillion In The Next Decade

Chinese investors are expected to spend $1 trillion in the real state market in the next decade, according to a report.

Chinese homebuyers are more interested in Toronto and Montreal than Vancouver, as stated in a report from Juwai, China’s largest real estate portal. The company predicts that Chinese investors will spend up to $1 trillion or C$1.27 trillion into real estate markets worldwide over the next decade, and most of that is likely to be spent in Canada.

Canada is the fourth-largest location behind U.S., Australia and Hong Kong for Chinese real estate investors.

In Toronto and Montreal, these two cities have the largest number of property searches in 2017, with Toronto being first then Montreal. Vancouver however came in third place.

Vancouver came in third because of the introduction of the 15 per cent foreign buyer’s tax in Greater Vancouver last year. This led to almost half of the cash flowing through Vancouver’s market to disappear. In April Ontario followed in their footsteps, after introducing a resembling tax in greater Toronto and areas around it. This would lead to potentially more interest on Montreal, which is the largest metro area without a foreign buyer’s tax.

During the first four months of 2017, Montreal witnessed a 37 per cent increase in home purchased by foreigners. Although the foreign buyers were just 1.8 per cent of all home purchased. Juwai estimated that “lower-but still significant-investment flows” into Toronto and Vancouver this year. This was stated in a recent report by Juwai.

The report also shows that amount of money these Chinese investors put into real estate worldwide is over $100 billion (C$127 Billion) for the first time in 2016. It rose by more than 25 per cent from 2015.

Just after China began granting citizens to leave the country with large amounts of money, Chinese investment in foreign real estate has been booming since 2010. Juwai’s chief of operations Sue Jong, said the amount invested in Vancouver has spiked by 845 per cent in the last five years.

“Our forecast suggests 2017 will also be one of the top three years on record,” she stated.

However this may be the first in years that the Chinese investment abroad does not set a new all time record, mainly because of the Chinese government suppression on cash outflows from China.

She also told the International Business Times “We forecast that Chinese investors will acquire more than $2 trillion (C$2.55 trillion) of overseas assets in coming decade or so as they close the under-investment gap.” They estimated that almost half would go into real estate.

According to the Juwai report, “Chinese investors are still underinvested globally. Almost as a rule – and certainly in Australia, U.S., U.K. and Canada- investors from other nations hold a much greater share of local property and other assets than do those from mainland China.”


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