Saturday, 15 February 2014

Sob Stories coming in post-cancellation of Immigrant Investor Program

in today’s Sing-Tao Daily (One of biggest Chinese newspapers in Canada): 

(I’ll attempt to translate below)

After IIP was abolished, there are fears that not only Greater Vancouver RE will be impacted, but also sectors such as education, retail, tourism, etc. We (Sing-Tao) will launch a series of reports to investigate in-depth the economic impact of this new immigration policy.

1. [Mr Zhong] is a Taiwanese businessman working in Shang-hai. He applied for IIP in 2010, however his case has been stuck on wait-list. To move forward on his children’s education, he sent his children to study in Coquitlam in July 2012 as international students (Dr Charles Best Secondary & Como Lake Middle). His wife accompanies his 2 children, currently renting near the schools. Mr Zhong thus became an “astronaut.” The Zhong family was about to purchase a $400k condo in Coquitlam last few days prior to Budget announcement.

Upon hearing that IIP is abolished, the Zhong family’s plan was in complete disarray. First, they immediately cancelled home purchase plans. Second, Mr Zhong is now planning to send his children either back to Asia, or to U.S. to contiue with their education.

When asked if he will consider applying for immigration via the upcoming “immigrant Investor Venture Capital Fund pilot project”, Mr Zhong thinks that 90% of money invested will likely be gone, and people who choose that route will most likely lose money. “If local businessmen are already having a hard time making money, for foreign capital to make money doing business here, is most likely difficult, if not impossible,” said Mr Zhong.

2. [Mr Zhong’s Friend] is also a “Victim” of IIP abolishment. His child is also studying as an international student while his family awaits IIP application approval. Mr Zhong’s friend purchased a $800k house in 2012. Now that IIP is canceled, he is going to sell his home.
“However, Canadian Dollar has depreciated against Chinese Yuan in the last 1-2 years. My friend will stand to lose the equivalent of $100k CAD, just from selling his house,” said Mr Zhong.

It is important to note: (which I forgot to mention when commenting on IIP cancellation last couple days):
- It is common practice for parents who’re on waitlist for IIP to send their children first as “International Students”.
- These students will occupy housing space, they could be renters (but more likely owners).
- We know that there were “45,000 rich Chinese families on the waitlist eager to come to Vancouver” as of last week.
- Some or many of these parents already sent their children to Canada, whether to study in grade school or to “claim an intention to study” and came in via “Student Visa” (rules will be tightened by Jun 1st, btw)
- Therefore, we should not just look at the loss of “2000 wealthy IIP families/year to Vancouver” starting 2015. We should also consider the RE that’s already purchased/occupied by thousands, if not tens of thousands of waitlisted applicants’ families (thanks to no foreign ownership restriction).
- These families will no longer be able to settle in Canada (at least can’t immigrate), and they will have to make major decisions whether to seek greener pastures (eg Australia/US, even back to Asia).

- The cancellation of IIP, per se, will not only reduce future demand but also actively increase housing supply in the near future.

-HAM: easy come, easy go.

Mainland millionaires turning backs on Canada and looking to the US & Europe, say migration agencies
Feb 14, 2014
“A rising number of wealthy Chinese are moving to the US and Europe because their once-favorite destination, Canada, has been scaling back entry, migration agents say.
Hong Kong-based immigration consultants are also trying to provide would-be migrants with alternative programmes after the scrapping of Canada’s investor visa scheme.
Hu Xiaofeng, a Chinese banker who obtained PR in the US last year through an investment programme, said “I wanted to move to Canada, but my agent told me the process was more complicated and the chances of obtaining Canadian residency status were slim.” “The important thing is to move away. I don’t speak English so the destination really doesn't matter.”

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