Foreign (mainly Chinese) buyers seeking to invest, in addition to global capitals like new York and London, prefer several cities in the Pacific Northwest, as well as in Australia and New Zealand. In many of these cities, such as Vancouver real estate prices rose to levels not available for local buyers.
Capital inflows contributed to economic recovery after the crisis. But housing prices soon reached critical levels, which required action from local authorities. Some have tried to use taxes to deter foreign buyers. In some cases, the taxes worked, at least for a while.
But some city had become desperate from the fact that the flow of customers is not slowing down, despite the efforts of the Chinese government to curb the outflow of capital.
Although Australia, New Zealand and some cities in Canada have increased taxes for foreign buyers, many are concerned that housing prices will continue to rise, writes The Wall Street Journal. Sydney, which imposed a tax of 8% for foreign buyers last summer, found that it didn’t stop buyers from abroad.
Vancouver in 2016 imposed a tax of 15% for foreign buyers. When that failed, the city authorities began to develop with the authorities of the province of British Columbia more stringent measures. In February, the province raised the tax to 20% and extended its action outside of Vancouver. The officials also introduced a new tax – 0.5% of the value of the property increases to 2% in next year for homeowners who do not pay income tax in Canada.
In April, British Columbia also announced measures to curb the resale of condominiums to completion.
After New Zealand last year imposed a ban on the purchase of houses by foreign speculators (this measure of the IMF has called “discriminatory”), buyers returned to Canada.
Last year Victoria (capital of British Columbia) was named the hottest new housing market in the world in the study of Christie’s International Real Estate.
Prices of single-family home in Victoria in may increased by 9% in annual terms and reached a record high level of about $570 thousand
And investors are considering Malaysia and Thailand the markets are ripe for foreign purchases.
Officially, Chinese citizens are allowed to transfer to offshore the equivalent of only $50 thousand a year. But there are many loopholes that allow you to make big purchases abroad. Over the next decade, according to forecasts of some analysts, the Chinese investors can spend abroad to $1.5 trillion.
The housing market in China, there was an almost two-year boom that gave the economy a significant boost, but has raised fears about the emergence of “bubbles”. The government is taking decisive action since the end of 2016, in order to reduce speculative buying.
As reported “Vesti.Economy,” at the annual Central conference on economic work in December, the leaders of China stated that the proposal of the borrowed funds should support the purchase of real estate for accommodation and to prevent speculation.
In November, China Central television (CCTV) announced that the country will strengthen financial regulation and take strict measures to combat speculation in the real estate market to stabilize prices and prevent bubbles.
China also promised to improve the management of land market and to prevent instances of over-land prices that are pushing up real estate prices.
