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Toronto- Foreign students drive real estate market

Toronto- Foreign students drive real estate market
Mar 15, 2012

 

As more people get exposure to Canada as an offshoot of globalization, the overseas investor market will rise, Hlinka said. As an instructor at George Brown College in Toronto, he has seen an explosion in the number of foreign students.

 

"When their parents come to visit, they get an idea of what real estate costs here, and they can't believe how cheap it is. They want to buy because they think it's a bargain."In addition to China, investors pouring money into real estate are flocking to Canada from the Middle East, Korea, Russia, India and the Philippines as well, said Tony Ma, who owns HomeLife Landmark Realty in Markham.About 65 per cent of Ma's agents are Chinese and the bulk of his business comes from Chinese clients. Most are new immigrants to Canada, but about 20 per cent are foreign investors, including parents overseas who buy on behalf of their children studying in this country.

 

Fewer than five per cent are pure investors with no ties to Canada, said Ma, a former neurosurgeon who moved to Toronto from Zhengzhou, China, in 1998."Most of our buyers are part of Canadian culture. I don't think they are going to push local Canadian people out of the market. When immigrants come to Canada today, they have money, not like when I came to Canada 20 years ago. I didn't have money."Last year, buoyed by his strong ties to the mainland China market, Ma's agency sold 263 homes priced at more than $1 million, with about 40 per cent of those being all-cash deals with no conditions attached.


Drawn to Canada

 

Canada's stable government and banking system and the relatively low prices draw investors, he said, pointing out that while condos in downtown Toronto can sell for $800 per square foot, in Beijing, the price is $2,000 per square foot and in Hong Kong it's double that.Moreover, to control prices, the Chinese government allows each family there to bank finance only two properties — one to live in and one to invest in — and buyers must pay 100 per cent cash for anything above the two-property limit, Ma said.

 

Not only are prices in Canada more affordable, homes and condos are a better value proposition, since they come ready to move into, unlike in China, where buyers get a concrete shell they have to pay to finish, he said."So they see an $8 million house here, they see the quality, they see the finishes and they think it's cheap," Ma said. "They can move in today."

 

Vancouver tops the list with Chinese investors because of the city's temperate climate and proximity to their homeland, he added. Janet Sinclair of Re/Max Hallmark Realty Ltd. in the Beaches neighbourhood of Toronto, routinely deals with foreign investors."They have driven prices up," she said. "Whenever we launch a new condo downtown we get a number of Hong Kong investors and a lot of people coming over from England. People want to put their money in Canadian real estate because they think it's safe."

 


Above article from an email received from 

 

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