There has been a lot of speculation that Chinese investment in Canadian real estate will decline due to the current conditions in the Canadian market.
The Prohibition on the Purchase of Residential Property by Non-Canadians Act, which came into effect on January 1, 2023, bars non-Canadian individuals and entities from purchasing residential properties in Canada. This ban was set to last until January 1, 2027, following an extension announced in February 2024.
However, an exception applies to work permit holders, who are allowed to purchase residential properties provided their permits have at least 183 days of validity remaining, and they do not already own more than one property in Canada.
While this was to improve transparency when it comes to property ownership, many postulated that this would also reduce the number of Chinese buyers and foreign investments in Canada significantly as a whole. But will it?
Quick Summary
- While Chinese investment in Canadian real estate remains strong, particularly in cities like Toronto and Vancouver, Southeast Asia is becoming a more attractive option for many Chinese investors due to lower prices and favorable investment conditions.
- The Prohibition on the Purchase of Residential Property by Non-Canadians Act restricts foreign investments in Canadian real estate until 2027, with some exceptions for work permit holders.
- New taxes, like Toronto's 10% Municipal Non-Resident Speculation Tax, aim to discourage international buyers, including Chinese investors.
Chinese Investment in Canada
It almost seems as if it was overnight that Canada became a hotspot for Chinese investors despite the numerous flourishing real estate markets in North America [1].
An international listing by Juwai.com, a popular real estate portal for Chinese buyers, ranked Canada as the third most likely country for property investment, behind only the United States and Australia. What the team at Precondo observed is that this interest was largely driven by Canada’s relative stability, strong education system, and real estate potential in key markets like Toronto and Vancouver.
While inquiries from Chinese investors have dipped since new regulations took effect, comments from our team at Precondo suggest there is still a steady stream of demand - especially from buyers with local ties or long-term immigration plans.
By 2024-2025, despite continued regulatory challenges, Canada remains a favored destination for Chinese investors, with cities like Toronto being particularly attractive. However, the cumulative impact of multiple taxes and restrictions has significantly altered the investment landscape.
Vancouver saw the first mid-rise condominium that was developed by a Chinese-owned company, which is being formed in Montreal where the company is also completing a 38-story residential tower. Many people from China and Chinese companies are also interested in buying Toronto real estate and preconstruction condos in Canada.
Distribution of Chinese Investments in Canadian Real Estate by City
| City | Investment Trends | Key Developments |
|---|---|---|
| Vancouver | Historically top destination due to Asia proximity and quality of life. Foreign-buyer taxes have significantly dampened interest. | Foreign ownership in new construction dropped from 15.4% in 2019; Bentall Centre sale for over $1 billion in 2022 by Anbang Group |
| Toronto | Resurgence in interest following Vancouver's decline. Diverse economy drives appeal despite new municipal tax. | Asian investment reached C$526 million in 2018; MNRST implemented January 2025 adding 10% tax |
| Montreal | Emerging hotspot driven by affordability compared to Toronto/Vancouver. Strong cultural appeal. | Inquiries have tripled in recent years; now ranks third in volume of buyer inquiries |
| Calgary | Challenges with vacancy rates but opportunities exist outside traditional markets. | Growing interest as investors seek better returns beyond downtown areas |
| Ottawa | Benefits from stable housing market and government presence. | Remains desirable despite less media attention; steady demand from foreign buyers |
Is China's Investment in Canada Wrongfully Blamed?
Many believe that investors in Canada will leave because they’ve been unfairly blamed for the rapid price increase in the market. International property portals from China; such as Juwai.com and many others have listed other factors as the main culprit; including the population growth and ridiculously low interest rates, arguing it should not be blamed.
Adding to this, many have started to fear government interruption through Chinese companies. Watch this clip from CBC News to understand their take on this topic.
Billions Worth of Properties Were Seized By The Chinese Government
On March 23, 2025, China’s State Council promulgated the Regulations on the Implementation of the Anti-Foreign Sanctions Law (AFSL), which took effect immediately. These regulations provide detailed procedures and enforcement mechanisms for China’s 2021 AFSL, significantly strengthening the government’s ability to retaliate against foreign sanctions [2].
The seizure of properties has created fear among foreign investors, particularly those from China, regarding their investments in international markets, including Canada. Analysts suggest that while it may deter some investors involved in wrongdoing, it should not impact those who are compliant with regulations.
The uncertainty surrounding these seizures has led to speculation about a decline in Chinese investment in Canadian real estate. However, many believe that legitimate investments will continue as the market stabilizes and regulations become clearer.
How Will Foreign-Buyer Tax Affect Chinese Property Investors?
The implementation of these taxes and restrictions has led to a noticeable decline in inquiries from Chinese investors, particularly in markets like Vancouver and Toronto.
Both Ontario and British Columbia offered rebates for foreign buyers who become permanent residents within specific timeframes after their purchase. For instance, Ontario allows for a rebate if the buyer becomes a permanent resident within four years.
As of lately, Chinese investments are heavily concentrated in Southeast Asia, particularly in countries like Vietnam, Thailand, and Indonesia [3]. The region's growing economies and favorable investment climates have made it an attractive destination for Chinese businesses seeking expansion.
According to Byron Burley, “the fact that Thailand has pushed past Canada as a favoured country for investment doesn’t represent any loss of interest in Canada.”
He further stated that many of the buyers active in Southeast Asia are new to the market and don’t yet have the wealth necessary to purchase in a developed country like Canada, where average prices are much higher.
Resilience and Adaptation: Chinese Investors Respond to Market Challenges
Discussions around Chinese investment have highlighted the need to balance openness to foreign investment with national security concerns.
The Ministry of Finance has acknowledged that while Canada remains an attractive destination for Chinese investments, certain transactions will face heightened scrutiny due to security considerations. This includes concerns about state-controlled entities potentially acting in ways that may not align with Canadian interests
As with all things real estate related, we’ll have to wait and see how the future of Chinese real estate investment unfolds with the newly imposed rules and other factors. But as the conditions with the Canadian market begin to stabilize, it’s safe to assume that the Chinese interest will continue to grow.
References:
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- https://globalnews.ca/news/4312361/montreal-hot-spot-foreign-buyers-canada-report/
- https://cms.law/en/chn/news-information/new-rules-on-the-implementation-of-china-s-anti-foreign-sanctions-law
- https://www.china-briefing.com/news/chinas-outbound-investment-odi-recent-developments-opportunities-and-challenges/
