Changes introduced in the Federal Budget yesterday are expected to contribute to cooling in Canada’s heated real estate markets. According to The Globe and Mail here, Canada’s Immigrant Investor Program (IIP) “allowed foreigners with a net worth of more than $1.6-million to gain residency and potentially citizenship by lending the government $800,000 that would be paid back in about five years without interest.” While the program was closed to new applicants in 2012 due to a massive bottleneck, now reportedly all applicants in the long queue, which includes over 45,000 Chinese millionaires, will see their applications simply scrapped.
With 80% of Chinese applicants to the Immigrant Investor Program indicating a preference to live in British Columbia, what will be the impact on real estate markets in this province? In Jordan Yerman’s piece at Vancouver Observer, he suggests that here in Vancouver, it’s too late – that the influence of foreign money on real estate prices, and our resultant “warped economic landscape”, is fait accompli. Still, he contemplates what effect the cessation of the IIP might have on local real estate development schemes in particular, asking: “Should the flood of rich people slow to a trickle, how attractive will that new high-rise be to investors before the construction stage?”