You just have to attend any condo launch in Toronto to understand the huge effect foreign buyers are having on our marketplace. Specifically, mainland Chinese buyers are the single largest condo client currently in Toronto. I estimate they account for $2.5 billion dollars of new condo transactions per year in the new condominium business, ponying up almost a half a billion dollars in deposits.
So, what is the reason for their love of Toronto? It is due to several reasons; one of course, is that there is a huge Chinese community already living in the GTA. Canada is also one of the few Western countries with an extremely high allowance for new immigrants. We have programs that allow for a landed immigrant status based on medium-level investments in Canada. Mostly though, it is due to where they come from. China does not have private land ownership. All the land sales are based on 70 year lease terms (or more). When you buy a condo in China, it is a leasehold form of ownership, not freehold like in Canada or the USA. You may own a condo in China, but you only lease the land it is built on. In 70 years, the land and the condo reverts to the state (or that is the fear). Rich Chinese prefer to buy property and get freehold absolute title, and they cannot do that in China. The number of Chinese trying to invest abroad is staggering. Additionally, the wealthy Chinese prefer a free society with access to quality education, health care, and freedom to have multiple offspring, among other obvious benefits.
Last year, one million wealthy Chinese became legal, permanent residents in the West. This is a huge economic reason benefitting cities like Toronto.