Rich Chinese buying property overseas draw resentment from locals
Property investments in Britain, the US, Canada, Australia and Singapore pay off for Chinese buyers, but locals are apparently growing increasingly impatient and unhappy
A taxi diver in Toronto said he remembered seeing Asian-looking men lining up in the rain outside a new residential development, two days before its grand opening.
Intrigued, he approached them and asked some questions.
Many turned out to be Chinese students lining up for interested buyers for some quick cash. Most of the others he tried to talk to were Chinese nationals who couldn’t speak a word of English.
“It was the most mind-blowing scene I’ve ever seen in my life,” the unnamed taxi driver later told his customer, Chinese businessman Zhu Weijun, himself an investor in Canada’s property markets.
It's not just Toronto that was feeling the impact of a stream of wealthy Chinese. Another residential development of 150 units in Canada's New Westminster sold out within two hours of its opening. It turned out 40 per cent of the buyers were Chinese, said a report.
Zhu and many other wealthy Chinese who buy properties overseas feel increasing resentment from local residents, according to a report by China's Oriental Outlook magazine.
“The locals now blame the Chinese for skyrocketing property prices," said Zhu.
The number of wealthy Chinese investing in overseas property markets rose sharply after 2008, a time when many countries were hit with a housing market crisis, according to the report.
Seeking a high return for their cash, those investors favour countries including Britian, Canada, the United States, Australia and Singapore.
The investment has been more than satisfactory for them:
Prices in downtown London rose 14.7 per cent between 2009 and 2011; prices in Vancouver have increased three to four times in the past decade; Toronto prices have increased 7 per cent annnually in the past six years; prices in Austrialia have doubled every seven years, said the report.
“Usually the property prices in areas well liked by the Chinese buyers will go up even if prices of other areas in the same country are going down,” said US-based investment consultant Li Chuntao.
But locals are apparently growing increasingly impatient and unhappy.
“Taxi drivers became suspicious and unfriendly the minute I told him I am Chinese,” said Sheng Mingchang, a Chinese investor who has bought houses in different countries.
Sheng said he had learned that contrary to what the Chinese had expected, many locals are not grateful that their properties are gaining value.
“The locals now have to pay a higher property tax after the appreciation, which means they will sacrifice their vacation budgets and skip more movie trips because of the foreigners' buying,” he said.
“Local polititians and newspapers quickly pointed out it’s the Chinese who are to blame,” Sheng added.