China Watch Blog has learnt that an increasing number of China’s rich are snapping up properties overseas in the expectation that domestic inflation will continue to rise after the consumer price index reached a 34-month high in May.
According to Colliers International, a real estate service provider, the proportion of Chinese buyers in Vancouver’s property market is on the rise. At the end of the first quarter this year, it increased to 29 percent of all homebuyers.
In the past six months, Chinese spent 1.3 billion yuan ($200 million) through Colliers’ international property department, with Canada, the UK and Australia topping the buying list.
“We are expecting a clear increase in the extent of mainland buyers’ purchases of overseas properties this year because of the government’s rigorous restraint on the number of homes a family can buy in key cities,” said Alan Liu, managing director of Colliers International (North Asia).
Due to the latest financial push from China, the average price of a home in Greater Vancouver rose 12 percent in 2010 and is expected to rise another 3 percent this year, according to the Canada Mortgage and Housing Corporation.
Demand from mainland immigrants now accounts for 29 percent of all new homes in Vancouver.
The situation in London is similar. Last year, overseas nationals purchased 28 percent of all resale properties across all prime London sites and 54 percent by value in the prime central London area in the more than 5 million pound ($8 million) price bracket, according to a recent report by Savills research.
“If the money from China were to start flowing into London at the same rate it does from billionaires in other countries, we would expect the value of ultra-prime London properties to grow by as much as 15 per cent,” said Yolande Barnes, head of Savills residential research. “The issue at present is that Chinese buyers aren’t taking, or can’t take, their money out of China.”If you think China Watch Blog's information is useful, click on cup of coffee on left hand side and make a small contribution via PayPal