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SCMP Reporter

Canadian property markets are ripe for investment this year as Hong Kong's most popular Western emigration target heats up in the countdown to the handover.

Canada's largest property agent, Royal Le Page, is projecting growth on residential property values of between five and six per cent, after years in the doldrums.

The only way is up for the market, according to Benjamin Ng, president of International Hung Hsing Property Agency, Royal Le Page's Hong Kong affiliate.

'Vancouver saw price adjustments in suburbs and areas with high populations of Hong Kong and Chinese people [such as Richmond and Coquitlam] fall from 12 per cent in 1994 to levels of about two per cent,' he said.

'Likewise, Toronto saw increases on property values drop for five years running. The Hong Kong market was not favourable over these periods and people couldn't liquidate to obtain the extra cash to buy homes in Canada.

'But now the market has bottomed, interest rates are dropping and we are expecting positive increases this year. Already in Toronto the volume of property deals has jumped 66 per cent,' Mr Ng said.

Dramatic increases in emigration to Canada in recent years have reflected not only the fallout from political uncertainty but also the preference which Canada enjoys as a destination for Hong Kong people.

Canadian Commissioner Garrett Lambert recently revealed that applications to emigrate to Canada were up 15 per cent on 1995, which had posted a 12 per cent increase on 1994 figures. Almost 30,000 people emigrated from Hong Kong to Canada last year.

As of last year, the Chinese ethnic community living under the maple leaf banner was close to a million and one in every two people leaving Hong Kong was choosing Canada as their destination.

A sound reason for the Canadian preference may be the favourable conditions for property investment.

The median price for a home in Vancouver as of May was C$343,900 (about HK$1.95 million). The average price across the country for a new home in May stood at C$150,500.

Interest rates for mortgages have dropped to 6.5 per cent (the lowest for two years), from 8.1 per cent just less than a year ago.

Sales of homes in Canada's top cities have rocketed this year, bolstered by impressive lending rates and, to a degree, stable employment figures (9.4 per cent) and positive job creation (150,000 this year).

'I think Hong Kong investors, just like Hong Kong emigrants, choose Canada because of the security,' Mr Ng said. 'It is one of the most stable areas in the world. Historically, the property market has experienced few big fluctuations.

'The only time was when Asian money started moving actively there in the early 1980s, peaking at around 1989-90 - this was a period of large capital gain.' Mr Ng said Hong Kong people involved in the Canadian property market were there for two reasons - either to become a Canadian citizen and stay (or at least have their children stay), or as large developers wanting to diversify investments.

He said people emigrating looked to places like Vancouver and Toronto, where there were large Chinese communities.

'The welfare system in Canada is of a high standard and the health system, particularly, is very good and also cheap - close to nothing when compared with Hong Kong.' Mr Ng said most interest in Canada was in the residential market, with people seeking homes at about C$200,000 (in Toronto) and C$300,000 (in Vancouver).

'We have two lines of sale, one in condominiums and one in re-sale housing. Both are well liked, the condominiums being marginally more popular, perhaps because even short-term investors can get a higher return for rentals.' He said about 10 per cent of Hong Kong interest came from local property magnates.

GROWTH CURVE Canada's largest property agent predicts residential property values to rise five to six per centInterest rates for mortgages have dropped, while volume of transactions in Toronto up 66 per cent so far this year 



Hong Kong migrants boost favourite property target