Macleans, “China is buying Canada: Inside the new real estate frenzy”

How China’s affection for Canada’s real estate is reshaping the nation’s housing market well beyond Vancouver

Paul Shen can tick off the reasons Mainland Chinese people buy property in Canada as surely as any fast-talking B.C. realtor. Some long to escape the fouled earth and soupy air of their country’s teeming cities, he explains, while others are following relatives to enclaves so well-populated by other Chinese expats they hardly feel like foreigners.

The richest, of course, regard homes in the West as stable vessels for disposable cash, but Shen lays no claim to such affluence. Last spring, the 39-year-old left behind his middle-management advertising job in Shanghai to seek the dream of home ownership he and his wife couldn’t afford in their home city. “We just followed our hearts to begin a totally different life,” he tells Maclean’s, adding: “We can make the house dream come true in Canada.”

The starting point was one-half of a modest duplex near downtown Victoria, close to the university where his wife is seeking a master’s degree, and priced about right for their limited means. Selling points ranged from the quiet of the street—perfect for their six-year-old son—to the stunning Vancouver Island vistas all around. High on his list, though, was Victoria’s comfortable distance from the bustling Chinese communities of B.C.’s Lower Mainland. As Shen—betraying his limited knowledge of pre-settlement Canadian history—puts it: “We wanted a place that would allow us to live with the natives.”

It’s hard not to smile at his idealism. Substitute any one of two dozen nationalities, after all, and you have a chapter in Canada’s cherished narrative of migration, settlement and shared prosperity.

But as a Chinese newcomer with a buy-at-all-costs resolve, Shen also personifies a phenomenon dividing those “natives” he’d like to call his neighbours. In the past five years, the flow of money from mainland China into Canadian real estate has reached what many consider dangerous levels, contributing to a gold-rush atmosphere in the nation’s leading cities, while stirring anger among young, middle-class Canadians who feel shut out of their hometown markets.

Its impact on Vancouver’s gravity-defying boom is the best known—and most hotly debated—example, as eye-popping price gains leave behind such quaint indicators as average household income, or regional economic activity. “We’re bringing in people who just want to park their money here,” says Justin Fung, a software engineer and second-generation Chinese-Canadian who counts himself among those frustrated by Vancouver’s surreal housing market. “They’re driving up housing prices and simply treat this city as a resort.”  Full story at Macleans

Related story:

BCBusiness, “China, Foreign Ownership & B.C. Resources”

B.C.’s natural resources are being gobbled up by foreign entities at a record pace. Increasingly, those entities are controlled by governments, such as China’s, that may have motives beyond mere profits. (Return to B.C.‘s Top 100 of 2011.)

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It’s that potential for conflict of interest that has a few people worried. Jock Finlayson, executive vice-president of the Business Council of B.C., appreciates the “investment renaissance” that B.C. is now experiencing, but recommends a cautious approach.


“Canada needs to look at this,” he says. “I don’t know what the right answer is, but I do agree that the private-sector rules don’t apply to state-owned organizations, and it’s not just the Chinese. It requires an explicit look. Do we hold them to a higher test? They are going to have to do it sooner rather than later.”


John Bruk, who 27 years ago co-founded and headed the Asia Pacific Foundation, pulls no punches on this topic. He sees a need for some concerted action before too many horses have fled the barn. Bruk has prepared a comprehensive analysis of the track record of the foundation; he believes the government-funded organization needs to be re-energized in part because of China’s growing economic influence, and believes it needs to do much more to help Canada address an unsustainable trade deficit with China. (Disclosure: I provided editing services for Bruk on this paper.)


“Is trading our ownership and control of core assets for more consumer goods, resulting in unsustainable trade deficits, good for Canada?” Bruk asks in his report. “Are we jeopardizing prosperity for our children and grandchildren while putting at risk our economic independence? In my view, this is exactly what is happening.”