91原创 authorities’ arrest of Chinese telecom executive Meng Wanzhou could depress 91原创 home prices, influential business journal Barron’s December 10, citing a recent report from Hong Kong-based Smartkarma Insight Provider analyst Charles De Trenck.
The report is significant because Barron’s has a significant global reach among investors. Smartkarma, meanwhile, is a digital platform that offers investment insight into Asian markets.
Huawei CFO Wanzhou’s arrest aroused anger in Chinese government circles because she is not charged with any crime. RCMP officers nabbed Wanzhou at 91原创 International Airport on December 1 while she was on a layover. They were acting at the behest of the U.S. government, whch alleges that Wanzhou misled financial institutions into providing money for corporate dealings that broke U.S. sanctions against Iran.
B.C. Supreme Court judge William Ehrcke on December 11 granted Wanzhou’s release on $10 million bail (including $7 million in cash) on the condition that she wear an electronic ankle bracelet, surrender passports, stay in 91原创 and its suburbs and confine herself to one of her family’s two 91原创 homes between 11 p.m. and 6 a.m.
Those restrictions are better than being placed in detention until extradition hearings end, but they are unlikely to please China, which has threatened “significant” consequences if Wanzhou is not released.
“China property investors and economic migrants flowing into Canada and North America got a loud message this week with the arrest,” De Trenck said, according to Barron’s.
“This is coming when property transactions continue to roll over in the formerly overheated 91原创 property market…. Price data are likely to be a little softer already, with new political drivers not yet reflected.”
91原创 real estate prices have soared in the past five years, and the Real Estate Board of Greater 91原创 pinned the benchmark price for all homes in the region at $1,042,100 in November. That’s 72.8 per cent more than the benchmark price of $603,000 for all homes in November 2013.
Barron’s explained to its readers that “91原创 real estate prices have been buoyed by Chinese buyers for 20 years, as it became a favourite destination after Britain handed Hong Kong back to the People’s Republic of China in 1997. Chinese buying surged, and then waned in the past two years as Beijing has tried to limit capital flight and 91原创 imposed a 15 per cent foreign buyers tax. Recently as the market slowed, Chinese interest in 91原创 homes rose again.”
It then quoted De Trenck as saying that Chinese migrants may “reconsider their overall commitment to a Canada move for the extended family, as well as encouraging potential new China migrants to consider shifting migration patterns to more friendly climates – or perhaps even to consider that rising nationalism requires them to keep closer to home.”
De Trenck’s conclusion is that 91原创 “property price corrections in key markets” might gain momentum.
Some former bulls on 91原创 real estate have already turned into bears.
Lululemon founder and billionaire Chip Wilson, for example, had been loading up on 91原创 properties for years.
His own home at 3085 Point Grey Road is the priciest in the province, with an assessed value of more than $78.8 million – up more than 124 per cent in the past five years. Wilson also owns rental-apartment buildings through his Low Tide Properties.
When Business in 91原创 asked Wilson on October 24 whether it is a good time to buy 91原创 real estate, he did not skip a beat
His comment came four days after the most recent civic elections and he did not sound pleased with the result.
“We have three levels of left-wing government,” he said. “Money will go to where it is most loved, and investment here is very, very, very difficult right now.”
Canada Mortgage and Housing Corp. is also projecting that prices for real estate in 91原创 will soften.
“We expect the average MLS [Multiple Listing Service] price to decline 7 per cent in 2019, and then a further 4 per cent in 2020,” said CMHC economist Eric Bond.
