Home Finance: Is The Canadian Way Better?

[william the wie]

The Canadian and even more so the Australian housing market is an extension of the Chinese real estate market. When the Chinese market blows up a lot more Canadians will buy American housing. (This also happens both ways along the Mexican border as well.)

You don't know how true that is.

Chinese millionaires have been pouring money into the Vancouver real estate market, pushing up prices to insane levels. Vancouver is the most expensive real estate market in the English speaking world, with an average house going for 9x income. Nowhere outside of China is real estate more expensive. But its cheap compared to Shanghai or Hong Kong, which is trading at 13x-15x income.

I thought that when China became richer, there would be less inflow into Vancouver, but the exact opposite has happened.

One of the possible head fakes in the US market is that when the capital control reforms really kick in, a lot of Chinese could move into the US markets generally, much like the Australian and Latin American money flowing into South FL now. If that happens the 2006 bubble will look like a minor blip because the Gulf SWFs will cash in on the boom and offset risk into the EU.