The overseas buyer tax on Metro Vancouver real estate has caused a massive drop in local listing inquiries from buyers searching on China’s largest housing portal Juwai.com, according to a new report.

China to Canada: International Home Buyer Insights, which was compiled jointly between Juwai.com and Sotheby's International Realty Canada, reveals that Vancouver listings enquiries on Juwai.com fell 78 per cent year-over-year in August 2016, when the tax took effect.

The report added, “Interest from prospective real estate purchasers redirected into other major Canadian markets in the months immediately following the tax’s implementation.

“[However] Sotheby’s International Realty Canada experts observed that increased interest from Chinese property enquirers did not result in matching surges in sales activity from this cohort in alternative markets.”

Despite the shift in interest to other markets, Chinese buyers’ inquiries about Vancouver real estate costing more than $1 million stood up much more robustly to the new policy than the lower end of the real estate market, and interest at the higher level soon recovered.

The report said, “In Vancouver, [Chinese buyers’] property enquiries for real estate over $1 million fell 67 per cent year-over-year in the third quarter of 2016, in the month the 15 per cent foreign buyers’ tax was implemented, but rebounded with an 18 per cent year-over-year increase in the last quarter.”

The report also dispelled the notion that Chinese buyers are primarily interested in high-end homes. The property inquiry data from Juwai.com revealed that 57 per cent of the site’s property enquiries for Vancouver, 67 per cent for Calgary, and 68 per cent for both Toronto and Montreal fell below $655,050 ($500,000 USD) in 2016.

“The median prices for Juwai.com property enquiries – $590,200 in Vancouver, $531,115 in Calgary, $458,928 in Toronto and $488,012 in Montreal– were within the range of, and in some cases, significantly below the average sale price of residential real estate within the market,” noted the authors (see graph below).

The survey also revealed the reasons cited by Chinese buyers for investing in Canadian real estate, also broken down by key cities.

Education was the most commonly cited motivation for Chinese interest in Vancouver real estate, cited by 44 per cent Juwai.com property hunters. This was followed by investment at 26.8 per cent and “own use” at 25 per cent (see graph below).