If you thought Chinese investors were starting to lose interest in Canadian real estate, think again.

According to a new report, both Vancouver and Toronto are forecast to be this year’s most popular destinations for Chinese overseas property investment.

“Buying sentiment for overseas properties among Chinese mainland investors has been gaining strong momentum over the past few years,” said Derek Lai, director of international properties for Colliers International real estate services and the author of the report. “To date, about 20% to 40% of the foreign property investors in these destinations are from the Chinese mainland.”

The report goes on to cite Vancouver’s Chinese population – what it pegs as 30% of city residents – as one of the driving factors for that investment choice.

Mainland Chinese investors are also lured by the Lower Mainland’s educational opportunities and proximity to home, according to Colliers.

Still, Canada’s two largest cities are facing some competition for Chinese investment, with London and Singapore rounding out the top four real estate destinations.

In the UK, rising property values and a very limited supply have accelerated the push into London, with Chinese investors now buying as much as 20% of all new builds.

Singapore’s low mortgage rates of 1.2% to 2%, relatively high and stable rental yields of around 5% and a transparent transaction system are responsible for attracting its share of mainland Chinese interest, according to the Colliers report relying on both interviews and investment declaration states.

In Canada, Vancouver’s appeal helped to drive up price gains in large parts of the Lower Mainland last year, with domestic investors concerned another year of strong transaction growth could present a real challenge to their own acquisition plans if sellers continue to hold out for well-heeled foriegn buyers. Many have only begun to lower their asking prices to meet the current market realities; ie, more supply than demand.

That said, there has been some movement.

The dollar value B.C. properties sold in January dipped 7.6% to $2.1 billion, compared to the same month last year. The average MLS residential price was 3.8% lower at $527,219 compared to January 2011.

Source: Vernon Clement Jones, Canadian Real Estate Wealth

Condominiums have become a hot sector of the Canadian real estate market, particularly as an option for first-time home buyers spooked by high prices for single-family homes, says a report released Monday.

Real estate services firm RE/MAX says affordability, lifestyle, investment opportunities and urban renewal efforts are among the reasons condo sales have spiked over the last year in some Canadian markets.

“As one of few affordable housing options available to first-time buyers, the concept is poised for dramatic growth in years to come,” Michael Polzler, executive vice-president for RE/MAX’s Ontario-Atlantic Canada operations, said in a statement.

RE/MAX said condo sales in the Greater Toronto Area are up 10.4 per cent, year-to-date, as of September, and now represent one out of every three homes sold there. In Ottawa, condo sales are up 11.9 per cent.

“The lifestyle has also gained a foothold with younger, hipper audiences as the definition of home ownership evolves with the changing demographic,” Polzler added. “Dreams of the small home with a white picket fence are being replaced by the funky loft apartment in proximity to shops, restaurants and entertainment.”

Price comparisons provided by RE/MAX for Ottawa showed the average price for condominiums had risen 12.9 per cent to $252,641 over the last year, but was still more than $100,000 cheaper than the average price of $366,587 for a single-family home.

While the RE/MAX report focused specifically on Ontario and Eastern Canada, Gregory Klump, chief economist for the Canadian Real Estate Association, said condo sales are becoming a bigger share of more expensive housing markets across the country, such as the Toronto and Vancouver real estate markets.

“(Condos) have been accounting for a greater percentage over time of all sales activity,” Klump said. “Condo units are an affordable alternative to single-detached home ownership.”

The RE/MAX report said other factors driving the condo market include urban redevelopment that favours intensification over urban sprawl, empty-nesters seeking low-maintenance retirement properties and investors hoping to sell when prices appreciate, the report said.

RE/MAX said the “vast majority” of newly built condominiums in Toronto are purchased by long-term investors from Asia and the Middle East, who will often rent them out until they find their desired sales price.

Read more: http://www.canada.com/business/Condominium+market+Canada+heating/3757559/story.html#ixzz16GysmzBG

Written by: Derek Abma, The Vancouver Sun (c)

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