Rich Chinese threaten to sue Canada for visa

imgres

I noted yesterday that Australia needs to take action to prevent an inflow of Chinese money from pricing Australian youth further out of the housing market. Canada recently took such steps by closing its wealthy investor visa program (that is booming here). Some Chinese millionaires are not happy:

A group of wealthy mainlanders has criticised the Canadian government for scrapping its investor visa scheme and are threatening legal action if the decision is not overturned.

More than 10 people who had applied for the visa met with reporters in Beijing yesterday to air their grievances. The group said they had wasted years of time, effort and money preparing to move to North America.

Finance Minister Jim Flaherty announced last month that the Canadian government was scrapping the Immigrant Investor Programme.

The scheme has allowed nearly 100,000 wealthy Hongkongers and mainland Chinese to move across the Pacific since 1986.

The abrupt … decision to scrap the scheme has left us very, very disappointed
RONG BING, BUSINESSMAN

An estimated 45,500 Chinese millionaires who were still in the queue for visas will have their applications “eliminated” and their fees returned.

Similar social dislocation will arrive here as well.

Comments

  1. v110.v112.v116

    We can only hope that the government can look at what is going on around the world and follow Canada’s example, other wise I see no end in sight.

    How can we continue to place our hopes of growth in the economy in housing?

    I don’t know. Been living in Melbourne for the past month. “Most livable city” I suspect someone is p!5sing in my pocket.

    • migtronixMEMBER

      @v110 is that the latest version??

      EDIT: Someone is definitely pissing in your pocket, take a trip down Punt Rd and you’ll wish you weren’t living

      • v110.v112.v116

        You are correct migtronix, why be delicate about the situation.

        Taking the train into the city everyday now, perhaps people can’t see the forest for the trees?

      • migtronixMEMBER

        @v110 Not sure which line you’re taking but Sandringham line is prone to delays!!

      • migtronixMEMBER

        Having said all that walking through Fawkner Park on the way to the hospital, along its Morton Bay fig tree lined boulevards, with the Eureka tower in the background, after going for a run earlier along Albert Park Lake (F1 preparations not withstanding), on a cool and sunny morning like today is pretty magical 🙂

    • They are p*ssing in your pocket, and it’s running through that pocket into Port Phillip.

      Melb – bad traffic, expensive housing, and a toxic bay. Liveable*

      *as defined by the usury industry

    • Hope springs eternal…..we could go to war against China, then let the mass repossessions begin!

  2. The idea of suing Canada is far fetched but should not be ignored completely as we construct an economy around selling over priced housing assets to CCP friend and relatives.

    Without a shadow of a doubt the most likely scenario is that if the poop does hit the fan in China, all those off shore investors in domestic real estate will be knocking on the door demanding resettlement into their investment properties.

    Even if the poop does not hit the fan – it is highly likely that most of the off shore buyers ‘believe’ that buying a domestic property is the fast track to migration acceptance.

    “Hey the real estate agent / developer said that it would help my application”

    Can you imagine the government saying no to any off shore ‘investor’ who pleads to be allowed to come and live in their investment property.

    So while the business model of expanding supply of apartments to accommodate the investment desires of off-shore buyers has merit, lets not kid ourselves that the transaction is purely an ‘investment’ in local property.

    Of course as everyone seems to be agreed that a BIG Australia is as natural as a Lamington with coleslaw – a sudden influx of ‘investors’ might be seen as a good thing.

    • Good comment pfh.

      After some pretty strong feelings over this issue, I’m trying to get some more reasoned arguments to make sense of it. Indeed, foreign investors will try to use investment to gain residency, and the value of that residency is quite high, justifying a premium for the asset, which is what we are seeing lately.

      How does one distinguish between foreign ownership of a business and foreign ownership of a house?

      • In Australia owning a house is owning a business.

        But jokes aside, I gather you are asking how do we distinguish between valuable foreign investment and investment that is little more than changing the ownership of an existing asset.

        Building new housing or factories or commercial or retail premises would be an example – though transferring ownership in the land is not essential to any of those.

        Investment in a new business or to expand an existing business would be another but to ensure skill transfer, joint ventures are most appropriate.

        Basically the approach taken by most of our successful competitors.

        Use foreign capital to increase our wealth and not just buy our existing capital assets.

  3. Ronin8317MEMBER

    The Canadian program was frozen since 2012, however the cancellation for the applicants was not announced until now. There are 46,000 Chinese in the queue, and most of them put up 800,000 CND as a 5 year no-interest loan to the Canadian government, so around 37 billion CND will need to be refunded.

    The scheme should never have been implemented in the first place.

  4. Speaking of Canadians, they spent a whopping $4.9 billion dollars on Australian property over the last financial year, which was an increase of 100%.

    Over the next seven years Canadians are set to spend an alarming $34 billion dollars on Australian real estate..and that is not even extrapolating the doubling of investment from the Canadians over the previous year.

    This kind of makes sense with what is happening on the ground. A friend of mine who attended a Sydney auction last weekend told me there were all these Canadian looking people bidding on the house!

    • Wow we are becoming the uber housing ponzi of the world!

      Well done, we should all feel proud.

    • ” told me there were all these Canadian looking people bidding on the house!” LOL. Good one!

      Can you clarify, of that $4.9 billion, how much was on non-residential property?

      The Canadian pension system is majority defined benefit. Canadian investment into real assets that derive a relatively stable income stream (big office, retail and industrial buildings and port infrastructure, etc) has ramped up significantly since 2009. And is here to stay.

      • No I cant tell you as the FIRB refuses to give the split between commercial and residential for country of origin.
        For me that is just even more alarming. No doubt the FIRB have something to hide here.

        Regardless of the lack of detail I also have no doubt the Canadians are driving up house prices.

        I mean, isn’t it obvious that the Canadians represent a very large proportion of total buying when last FY, total residential property sales were only $240B??

        And if we extract this number (just like the property experts at Credit Suisse did) for the next seven years we get a very low number of $1.6 trillion dollars. So as you can see, the Canadian buying of our property will, alarmingly drive up house prices.

        I encourage you all to make observations of any Canadian looking person at an auction. Please photograph them. Tell your friends and report it in to the experts. I think they are Paul Murray at Sky News and Paul Sheehan at the SMH.

        God help us all if this gets out of control.

    • Speaking of Canadians, they spent a whopping $4.9 billion dollars on Australian property over the last financial year, which was an increase of 100%.

      I noticed that too. It could be all those rich Chinese who bought out Vancouver now call themselves Canadians and are now splashing their cash over here.

  5. How many of the applicants actually want to become Canadian though or are they more interested in have a backup residence in case things go bad in China?

  6. They’re suing the government for changing the law? Unless the government has breached their constitution I don’t see how that is possible. The government is there to make and change laws.

    Sounds like impotent posturing to me.

    • RealEstate.com.au have also launch a new Mandarin only Australian property site I’ve noticed. I get the uneasy feeling we have seen nothing yet.