As we’ve pointed out time and time again, foreign – mainly Chinese – buyers seeking to park their ill-gotten gains beyond the reach of the Communist Party have – in addition to global capitals like New York City and London – favored a handful of cities in the Pacific Northwest, as well as Australia and New Zealand. Many of these cities – for example, Vancouver – have seen property values rise to levels that are unaffordable for local buyers.
While the influx of capital helped fuel an economic recovery in the aftermath of the crisis, home values soon reached crisis levels that demanded action by local officials. Some places have tried to use taxes to deter foreign buyers. In some instances, the taxes worked – at least temporarily.
But with the flow of buyers refusing to slow despite efforts by the Chinese government to stop money moving offshore, many of these cities are getting desperate. And after years of occasional headlines, it appears the crisis has finally become dire enough for the mainstream press to start paying attention.
To wit, government officials in Canada and Australia who spoke with the Wall Street Journal for a story about how Chinese homebuyers expressed concern that widespread foreign ownership has created bubbles in local real-estate markets. Even as Australia and New Zealand and some Canadian cities have raised taxes on foreign buyers, many are worried that home values will continue to climb, foiling policy makers best efforts to control them. Since it passed an 8% foreign buyers tax last summer, Sydney says foreign buying hasn’t let up.
Jon Ellis, chief executive of Investorist, an online portal for cross-border property transactions, said Chinese property buyers are an “unstoppable juggernaut”. In some markets with large Mandarin-speaking populations, locals can spot real-estate ads in Mandarin at bus stations and benches in the surrounding area.
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