New Chinese money rules threaten tide of foreign buyers in Canada and USA

Some experts are warning that the flow of Chinese money into North American markets will slow to a trickle this year, due to new monetary rules and stronger enforcement....
"Strict new government scrutiny on Chinese people who want to convert their money into other currencies threatens to slow the rush of foreign property buying that has stoked sky-high home prices in Canada and around the world.
For months, China has sought to dam the flood of money pouring out of its borders, which has rapidly diminished its stockpile of foreign reserves.
It has raised new barriers to companies buying abroad and moving money out of the country.
Now, authorities in China are taking new steps to bar individuals from putting their cash into overseas markets to buy homes and other investments, a change with important implications for cities such as Vancouver and Toronto where Chinese buyers had contributed to frenzied property trading."

Others, feel this is overblown, 
"Those in the property industry, however, say they aren’t worried Chinese buying will stop. In the first few days under the new policy, clients have asked questions, but, “I haven’t seen any anecdotal reasons to believe that there will be a drop in inquiry levels from a year earlier,” Charles Pittar, chief executive officer of, the top international property website for Chinese buyers, said in an e-mailed statement.
Rather than dry up, he expects Chinese home acquisitions to grow alongside rising domestic wealth and an appetite for overseas property.
“There is no doubt that Chinese buyers will set new records for international property purchase in the years to come,” Mr. Pittar said."

Only time will tell which side of this story plays out.  An interesting note in the article, is a window to the motivation behind this, "a bid to keep the country’s foreign reserves from dipping below $3-trillion, a line Beijing does not want to cross, he said. In November, China’s foreign reserves stood just $50-billion from that mark."  Followed by, "Every month, Chinese people spend between $15-billion and $20-billion abroad on services such as tourism and education. It’s a huge cash drain."

To read the complete article, please click here 


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