Canada's rural property scene sizzles with Chinese money

Female workers wait for their containers of blueberries to be weighed on the back of a truck, before they are transported, at Surrey Farms in Canada. Provided to China Daily

Tax breaks-fueled buying spree unsettles the blueberry-rich Pacific Coast market

An aging mansion sits vacant on an estate outside Vancouver, the garage overtaken by a blueberry sorter and a walk-in cooler packed with the fruit.

The owner, an investor from the Chinese mainland, leases the estate to Fred Liu at such a bargain the farmer grows blueberries in its fields even though the bottom has fallen out of the market.

As it turns out, the same wave of Chinese wealth that has fueled real estate booms in cities like New York, Sydney and San Francisco and stoked the art market worldwide also has contributed to an unexpected glut of blueberries.

Chinese investors riding a hot property market along the Pacific Coast have socked millions into a belt of protected farmland around Vancouver, long a destination for Asian immigrants, and many have taken advantage of Canadian agricultural tax breaks, agents and farmers said.

Because much of the land is restricted to farming, rents have remained stubbornly low. Veteran farmers and entrepreneurial newcomers have snapped up the cheap leases, eager to cash in on the blueberry's ascent as a super food and the promise that a trade deal with China would open the world's second-largest economy to fresh Canadian exports.

But demand has yet to meet bullish projections. Delayed trade negotiations and a surge in global blueberry production have prevented China's rising middle class from eating enough of the British Columbia bumper crop that Chinese investors helped sow.

The result: a bubble for Vancouver area farmland and a bust for berries.

Prices for rural property near Vancouver have surged - hitting, in one recent deal, 230 times the per-acre average for Canadian farmland. And blueberry prices have collapsed, dropping to less than C$1 per pound at peak season, half what some growers said they were getting a few years ago.

Norm Letnick, British Columbia's agriculture minister, said he doesn't see it as a glut, and he downplayed the sharp price drop at packing houses.

Growers may be doing better at roadside stands, he said. "Because they don't have a middle man, they might be making very good net profit."

For many farmers, that view misses the bigger picture.

"Rich people, they can buy the farms, but they don't want to do the farming," said Liu, who grows organic berries for export to Asia. "It's very, very, very cheap to lease their farmland."

But, he said, "Farmers are not getting rich."

About half the listings in recent years for smaller farms and nearly all the larger ones near Vancouver have been purchased by buyers with ties to the Chinese mainland, agents said.

Canada doesn't track the nationality of property owners, and British Columbia only began doing so in June. It reported 18 percent of sales in recent weeks in Richmond, home to one of the most well-established Chinese communities in Canada, were to unspecified foreign nationals living abroad. Chinese nationals with resident status in Canada were excluded.

The buying spree has set records. A 4.5 acre blueberry farm with no house sold late last year to a Chinese investor for C$2.58 million ($1.97 million), or C$573,000 per acre. Nationwide, farmland averages C$2,460 per acre, according to Farm Credit Canada.

The British Columbia Blueberry Council, a trade group representing hundreds of growers, said much of the interest was from Chinese business people who see berry farms as an export opportunity, much like those who have bought vineyards in recent years to export British Columbia wine to China.

Real estate agents said some Chinese nationals were looking at the redevelopment potential, viewing farms as lottery tickets that would pay out if urban sprawl one day forces officials to scrap strict prohibitions.

"They're playing the long game," said agent Michael Lu.

Others have built luxurious estate homes with an eye toward retirement and surrounded them with berries.

Reuters