Forget about competing with the family up the street the next time you bid on a new home - the real competition may be sitting at a computer in Shanghai.
With their government worried about a domestic housing bubble, more mainland Chinese investors are looking toward Canada's booming housing market as a haven for their dollars.
"The world continues to get smaller and smaller," said Don Lawby, president of Century 21 Canada Ltd. "There's investment coming from all over the world, but especially from countries that have any sort of restriction on ownership."
Chinese officials - alarmed by housing prices that increased by 7.8 per cent in the country's 70 biggest cities in 2009 - imposed a sales tax late last year on homes sold within five years of their purchase, in a bid to dampen speculation.
This has investors casting their eyes out of the country, with some Chinese entrepreneurs offering tours in the United States so investors can see properties in person.
"Most of us have realized that traditional manufacturing industries no longer bring us more profits, so many who used to run factories are switching to stock markets or real estate," Zhou Dewen, head of a Wenzhou business association, recently told Associated Press when asked why he was organizing out-of-country tours for investors.
While Chinese residents have long looked to Canada as a site for their capital, and while they have been buying steadily in the Vancouver and Toronto real estate markets for years, the combination of a clampdown at home and a blazing hot market in this country is spurring even more interest.
Canada's real estate market rebounded strongly in 2009, with sales improving 7.7 per cent over 2008, and the national average price moving 5-per-cent higher. Low interest rates and a backlog of demand have been cited as reasons for the surge, and many analysts are calling for the market to cool down as domestic demand fades.
The prospect of any sort of slowdown makes a pool of potential overseas buyers that much more attractive to the country's real estate industry.
To tap into the demand, Century 21 will unveil a new Chinese version of its website this week, the first major real estate company to do so in Canada. The site is the cornerstone of a strategy that will see the company increasingly marketing properties directly to consumers in mainland China.
"Right now, our focus is on serving Chinese clients in Canada," said Mr. Lawby, who is also president of Century 21 Asia Pacific.
"However, a byproduct is that Canadian listings will be more visible to buyers from around the world … there's always a need for a safe haven to place money and invest."
Vancouver agent William Nip estimates he sells 40 properties to Chinese nationals each year, a number that has increased every year since he started dealing in property 17 years ago.
So far this year, most of his clients are looking to spend up to $2-million on premium properties.
"The bubble in China is already very big, so the government is encouraging them to take their money and spend somewhere else," said Mr. Nip, who works at Sutton Group West Coast Realty.
While there's no doubt the Chinese are looking abroad, Patrick Chovanec, a business professor at Beijing's Tsinghua University, cautioned that many would-be buyers aren't in a position to actually spend outside the country's borders despite their interest.
"Only Chinese citizens who already have found a way to get some money offshore are actually in the position to invest in real estate in Canada or the U.S. It's not an insignificant amount of money, but it's a tiny portion of China's savings pool."Report Typo/Error
Follow us on Twitter: