China’s financial crisis could fuel rise in Vancouver house prices
It’s been a historic week on the Chinese stock market, with investors taking a beating in Shanghai.
But the pain has been shared around the world, as markets everywhere have shed value.
“Global markets lost a combined 2.6 trillion dollars worth of value. It is the worst start to the new trading year in two decades,” said Robert Levy, a financial analyst at Border Gold Corp.
With the Chinese economy faltering, people with wealth to protect are moving it. According to economists, some of that money is landing in Canada.
“Canadian housing in a world context is essentially on sale right now,” says Derek Holt, VP of Economics at Scotiabank. He says a 70 cent Canadian dollar is bringing investors into Vancouver’s housing market
“Chinese buyers have always had an affinity for Canadian real estate and they are going to continue to buy Canadian housing.”
Foreign capital reserves in china are down 120 billion dollars last month alone, and the number going up every month as the government deals with weaker than expected growth, propping up a currency that is drastically overvalued.
According to UBC economist Michael Devereux, some are predicting growth targets in China will shrink to three to four per cent – but if the bottom drops out of the Chinese economy, the influx of cash to Canada could go even higher.
“Then all bets are off,” says Devereux.
“We will see large amounts of people trying to get out why they still can.”