The appetite of wealthy Chinese for Toronto’s real estate might now be recovering after “dropping like a bowling bowl” upon the implementation of the foreign buyers’ tax last year, according to the latest study conducted by international property portal Juwai.com.
The analysis, which looked at Juwai’s index of Chinese would-be buyers of Toronto homes, noted that the number of inquiries has been on a steady uptick since hitting a low point in January 2018.
“After the new foreign buyers tax kicked in, Chinese demand dropped like a bowling ball, but now that ball may be bouncing,” Juwai.com CEO Carrie Law said, but added that whether the upward trend continues or not remains an open question.
Still, Law noted that “while we don’t expect Chinese offshore buying to recover to prior levels this year in Toronto, we do expect it to recover above the levels seen in the immediate aftermath of the tax’s imposition.”
“Chinese buyers still want to buy in Toronto. They still want to study there. They still want to work there. And they still want to raise families there.”
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According to fresh data from Financial Times Confidential Research, 56.8% of Chinese outbound investors will invest more of their wealth overseas in the next two years. Law stated that if these people “have pure investment motivations, their goals tend to be stability and risk hedging, rather than high returns. Let’s not kid ourselves. They would most likely get much better returns on their money in China then they will in Toronto.”
Law further argued that “Prices are stalling in Toronto is because credit is getting more expensive and mortgages harder to obtain. The foreign buyers’ tax cannot have had the market wide impact that has been attributed to it.”
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