Pop Goes the Overseas Chinese Housing Bubble

The big winners from Chinese foreign investment will be Canadian lawyers and populist politicians. The big costs are natives priced out of their own city and clogged courts.

Vancouver Sun: B.C. court ruling foreshadows flood of litigation, forced sales involving Chinese home ownerships, lawyer says

Chang’s claim says that defendant Xing Xua Hua agreed to buy her Kitsilano home in June 2016, for $3.9 million. Hua, who currently owns four homes in Vancouver, paid Chang a deposit of $190,000. Hua was to complete the purchase of Chang’s home by the end of September 2016. But Hua asked Chang to extend the closing into October 2016, and offered an additional $500,000 deposit.

Chang agreed to the sale extension, her claim says, but she never received the additional deposit funds, and determined the sale had collapsed.

In November 2016, she sued Hua, claiming losses and damages from the collapsed deal.

In a response, Hua claimed that after the purchase deal wasn’t completed in October 2016, Hua’s son, named Hua Wang, offered to buy Chang’s home for $3.9 million. But Chang did not accept the offer from Hua Wang, filings say.

In June 2017, a B.C. Supreme Court judge ruled in Chang’s favour. The judge ordered Hua to pay Chang damages of $583,000, plus legal costs for the case. Chang was also given a mortgage against a Shaughnessy home on the 2000-block West 19th Ave owned by Hua to secure the judgment.

The judge then ordered the sale of that Shaughnessy home and further ordered that three other properties owned by Hua, including a second Shaughnessy home valued at $3.1 million, and two Vancouver condos, could be sold. The judge said Chang could set the prices of Hua’s four properties and sell them successively, until she received her full court ordered payment.

A review by Postmedia of land title and mortgage documents connected to Hua’s four Vancouver properties show that he was involved in a number of real estate deals in 2016, and that multiple bank and private lenders have issued loans to Hua. These successive loans are secured against his properties. This suggests that multiple lenders could become involved in a complicated B.C. court battle involving Hua’s properties, in order to seek repayment of Hua’s real estate-backed debts. The issue being triggered by the forced sale of Hua’s properties.

One private lender with loans against several of Hua’s homes, according to documents, is named Su Cheng Chen. CIBC has issued multiple mortgage loans to Hua, as has Reliable Mortgage Investments Corp., according to property documents.