David Yin and his Chinese clients are in a race against time. The Chinese-Canadian realtor has a few weeks before a deadline in the new year: Canada’s ban on foreign home buyers.
“My clients need to complete their sales [in] December,” Yin, who works with Sutton Coast West Coast Realty, explains. The new law, which comes into effect on January 1, 2023 — will prohibit non-Canadians from purchasing domestic property over the next two years.
The controversial ban comes into place as part of the Canadian government-led measures to “cool down” overheated housing markets in cities like Vancouver — which currently ranks as the third most unaffordable city for housing in the world, behind Hong Kong and Sydney.
For the last few years, Vancouver’s skyrocketing property prices and the pandemic-led rises in the cost of living had not been a deterrent for Chinese buyers looking to move overseas, but that has changed over the past year, says Brendon Ogmundson, chief economist at the BC Real Estate Association.
“If you hypothesized that foreign investment and capital is the most significant driver for housing, we were able to test that claim… [For part of the pandemic, we] closed the borders, shut off foreign investment and shut off immigration over a year, and we [still] ended up with record high home sales,” argues Ogmundsun. “Banning foreign buyers can only hurt our reputation.”
Kashif Ansari, Group CEO of Juwai, an Asia-based real estate platform which connects mainland Chinese buyers with overseas agents, echoes Ogmundson’s sentiments.
“This ban will eliminate buying by Chinese who live in China, but that group accounts for a small share of Chinese buying,” he explains. “We don’t expect the ban to significantly impact overall demand by buyers of Chinese origin because most of these buyers already live in Canada — and in many cases [are] on the route to becoming Canadian citizens.”
Find out more about how Chinese buyers can achieve the ‘Vancouver Dream.’