Cam Good: Real estate protectionism is miguided
In the last two months, we've sold over 700 condos in Toronto. Sixty per cent went to Mainland Chinese buyers. In meccas like Richmond, 98 per cent of the hundreds of homes we've sold are to buyers who are Chinese. Even in White Rock, we sold 35 per cent of a new condo tower to buyers from Mainland China. For a new market like White Rock, that's a shocking number.
As the North American media has just recently picked up, buyers from Mainland China are a driving force in our real estate market. The staggering truth is we've seen just the tip of the iceberg. There is a rapidly growing middle class in China which is just now beginning to realize they can afford homes abroad.
Chinese buy Canadian homes because they care about nothing more than their kids, their kids' education and real estate. They also want a safe haven for their wealth. These are some of the push factors.
Pull factors are that Chinese are crazy about Canada. They think it's safe and stable, with a great education system, and we survived fairly well through the global economic downturn. Plus, our real estate is freehold and less expensive, even in pricey Vancouver.
A recent story in the Wall Street Journal reported that Chinese are "stampeding to Vancouver and Toronto, two of Canada's hottest markets." For that, we should be grateful. Chinese have made owning real estate in Canada more rewarding than any of us expected and they have made our society distinctly richer by bringing their values and culture to Canada and sharing them with us.
But instead of gratitude, I see growing fear and resentment that foreign buyers are inflating prices and pricing "us" and "our children" out of the market.
I recently hosted a helicopter tour of White Rock for a select group of Chinese realtors. In response to the media coverage of that event, my office was inundated with emails from people who think this will cause a Chinese takeover. I was threatened and faced the brunt of many nasty words - too nasty to put into print here.
This is not, unfortunately, a minority voice. Former Vancouver city councillor Peter Ladner recently spoke out about how Chinese homebuyers are "warping" real estate prices in the city. What to do?
There are a growing number of people and politicians who profess imposing restrictions on offshore property investors - as they do in countries like Australia - to protect our interests. But in the last two years, our government has imposed higher standards that make it more difficult and expensive for immigrants to come to Canada. And even though we've raised the bar, immigration remains strong. The government is doing what it should. We are benefiting and the system is working.
It's too late for protectionist measures anyway. There are so many Chinese here already. We are a nation of immigrants after all and Chinese Canadians are some of the best. I've got no tolerance for this kind of attitude. In fact, I would love to see the advocates of this nonsense debate their ideas with some native people. I think they would really enjoy the irony.
Let's look at what this global trend is doing to benefit us: It's driving demand and creating a real estate industry that is the envy of the entire world. Our land, homes and businesses have become more valuable and Chinese investment is a big reason we weathered the global economic storm as well as we did. We are finally outperforming and stepping out from the shadow of our big American brother. The argument for protecting our real estate from offshore investment is not economic, but emotional. It's based on fear and who has time for that? Not me.
If you suffer from real estate impotence, don't blame Chinese people. Besides, getting all worked up about it will only make it worse. Have a glass of wine. Relax. Stop feeling sorry for yourself and pick up the phone to call a realtor or a mortgage broker, either of whom will be more than happy to show you how easy it can be to get your real estate groove on.
Real estate is the best investment you'll ever make, but don't take my word for it. Ask any of the 70 per cent of Canadians who are already owners. Or a Chinese person.
Cam Good is president of TheKey.com, a real estate sales and marketing company. He just opened the first real estate sales office in Beijing to sell Canadian real estate directly to buyers in Mainland China.
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