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Comment by wyck | Hacker News Reader

This isn't new, nor is it only related to China. Mexico, Russia, many middle east countries, and whole slew of other places has poured billions of cash into Canadian real estate. It's done via regulated banks who turn a blind eye because there nothing illegal about how it's being done. The are skyrises being built in every major city in which 95% of the tenants are not Canadian, and they sit practically empty. Some city blocks are a virtual ghost town of empty buildings the most Canadians can't even afford.

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Western real estate is the new gold. It's protected by the entrenched lawful property rights of western countries, so money made in countries without those rights are going to flow in.

Think about it. If you had made a few million based on your having positional power in a country where you would be jailed or killed once people found out what you had been doing, you'd get the money out to somewhere your descendants would have safe access to it no matter what happened.

> Western real estate is the new gold.

If you think western real estate is nuts, Chinese real estate is even crazier. Those Wenzhou house wives supposedly got started locally moving onto the rest of China and now the western world. It’s probably way more complex than that, however.

> If you had made a few million based on your having positional power in a country where you would be jailed or killed once people found out what you had been doing, you'd get the money out to somewhere your descendants would have safe access to it no matter what happened.

If that hypothesis were true, then Chinese would be fleeing the Chinese real estate market for the west, which isn’t really happening. It’s more of an expansion (if it is actually happening in significant amounts of money at all, which is not proven).

then Chinese would be fleeing the Chinese real estate market for the west, which isn’t really happening

This is basic diversification. No one would expect them to flee the local market while it's still working, but buying some assets in foreign cities protects against the Chinese government cracking down on people owning multiple homes in the local market. It's quite sensible really.

I don't think it's trivially easy to get money out of the country, so that might be part of it. Another thing is that for many people, being able to buy any real estate is attractive, even when you don't really get to "own" it in the western sense, it's still a lot like ownership (you own it for some number of years then have to give it back IIRC).

To be sure, much of the money I used for the downpayment on my house in the USA was earned in China, so...there are ways to get it out. Foreigners follow different rules, however, but Chinese citizens still had $50k/year quotas they could use, over a few family members it added up, and that wasn't the only way to get money out.

China practices 99 year leases, although everyone is expecting those leases to be rolled over with minimal amounts of money. When that didn't happen on earlier and shorter 40 or so year leases (made before the current policy was set), the central government had to step in and forced them to be rolled over, otherwise the rest of the country would have panicked.

It's easier to put the blame elsewhere than to look at your own failing systems.

That’s true. There is actually a lot of Chinese buying interest in my own Seattle neighborhood, but then I talk to who are buying…Googlere and Amazonians like me and my Chinese wife, it is the tech money that is driving real estate prices, at least here.

Vancouver might really be (or have been) about overseas money coming in, however. Like what we know happened in Hong Kong. I’m not sure.

Very few people realize that the western acceptance of blood money actually fuels autocratic regimes around the world and makes them much stronger. For example, Russian power elites have millions and billions in assets in the West. Hence, this new "cold war" with authoritarian Russia and Putin is a total farce. But those blood money will ruin the West, one day or another. Trump was the first major sign of it.

It might also be from the billions of unemployment and SBA fraud sent overseas during covid.

https://news.ycombinator.com/item?id=23213162 https://news.ycombinator.com/item?id=27480619

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