Cities battle against a flood of Chinese real estate investors

In 2016, Chinese investors bought $100 billion worth of property across different countries. Most countries normally like to encourage this huge influx of funds (and tax revenues!), some countries have tried to stop that influx. 

In 2010, Chinese buyers purchased only $5 billion worth of international property. As such, the interest of Chinese buyers for overseas real estate has grown a lot.  And more is expected in the near future.

However, some countries such as Australia and Canada are becoming increasinly concerned about this interest of Chinese buyers and trying hard to make it more difficult to them. For example, Vancouver (Canada) has now a 20% tax on foreign buyers. Toronto also enforced a special tax.  At this point in time, there is no restriction for Chinese to buy real estate in the US.

In the U.S., Chinese investors are also the biggest segment of foreign buyers. They spent a whopping $31.7 billion on residential homes in the U.S. between April 2016 and March 2017, according to data from the National Association of Realtors. 

Interesting enough, China's government is also trying to stop the amount of money that its Chinese citizens put in overseas real estate. New rules state that Chinese citizens can only exchange local currency worth a maximum of $50,000 per year, but lmany oopholes still exist to get the funds out of the country.  It does make more time to get the money out for the Chinese buyers but the amount of interest of Chinese buyers for overseas real estate is still very strong.

Source: “Western Cities Want to Slow Flood of Chinese Home Buying. Nothing Works,” The Wall Street Journal (June 6, 2018)