A significant proportion of the recent Chinese capital flight has ended up in Canada
Canada and the United States remain the top destinations among wealthy Chinese, according to the Sweetome Hurun Global House Price Index covering the first half of this year.
The U.S. was cited by the study, which surveyed Chinese property investors, as the most favourable emigration target (79%), along with Canada (29%).
Canada had three cities belonging to those categorized as offering the highest return in investment, while the U.S. had 19 metropolitan markets in the top 50.
Los Angeles was the most preferred destination for real estate investment, topping the list for the fifth consecutive year. Other desirable markets were (in order) New York, Boston, San Francisco, Seattle, London, Vancouver, and Toronto.
Moneyed mainlanders also want their children to undergo education in the U.S. the most, followed by the United Kingdom, Canada, and Australia.
As of mid-2019, various estimates have placed Chinese capital flight at up to $800 billion since 2014, with a large portion ending up in Canada.
And while legitimate investors have accounted for a fair share of this, a significant slice of the funds has also been found to enter Canadian markets via money laundering and other illegal channels.
Along with untrammelled speculation, these sums have been cited as major drivers in the massive gap between local incomes and home prices in the country’s largest markets.
“These housing bubbles are a major threat to the economy, leading to a huge increase in debt as Canadians try and buy homes and create the potential for a catastrophic collapse,” author and researcher Mitchell Anderson argued recently.
“The Canada Revenue Agency needs to go hard against offshore elites using Canada as a country of convenience,” he added. “Canada could also improve its wretched record and stop allowing the real owners of businesses and property to hide behind shell companies.”
