The author of Millionaire Migrants was one the first to provide evidence that the foreign real-estate dreams of China’s wealthy have arguably had more impact than anything on Metro Vancouver’s housing unaffordability.

UBC geographer David Ley, along with SFU’s Wu Qiyan, told me early this year the city’s real-estate bubble would be punctured when leaders of the People’s Republic of China further restrict money leaving their country.

Now strong signs are appearing that Metro Vancouver’s real-estate balloon has indeed been pricked by China’s heightened capital controls.

Demand for multi-million dollar dwellings in Metro Vancouver is falling. “All the high-end stuff is sluggish,” says Vancouver realtor-analyst Steve Saretsky.

Sales volumes and prices on detached houses are especially dropping on the west side of Vancouver, in Richmond and in West Vancouver, where Mainland Chinese buyers had been active buying and building mansions.

Real Estate Association of Greater Vancouver figures show the median price of a detached home is down more than $500,000 since February, to $1.7 million.

(The declining demand for detached homes counters a run on one-bedroom condos in Metro Vancouver. Like others, Saretsky believes these small-condo purchases are not particularly tied to Mainland Chinese investors.)

 Veteran Canadian real-estate data analyst Stephen Punwasi also has little doubt “Chinese capital is having a tougher time getting out of China” since leaders introduced tighter controls in January.

The co-founder of Better Dwelling, which specializes in housing data, said the volume of “hot money” leaving China in August has plummeted almost 40 per cent compared to August last year, to roughly $46 billion US. This is the kind of cash that typically goes into foreign real estate.

Ley is also convinced low and medium-wealthy Chinese investors are being “bitten” by China’s new controls.

However, Ley cautions that many of China’s super-wealthy “have already moved a lot of capital outside the P.R.C.” into trust funds, offshore tax havens and secret bank accounts.

Even though Chinese and other foreign capital will continue to flow into Metro Vancouver and Toronto — with unpredictably destructive effect for locals — the phenomenally high volume of detached-home sales of the past few years is seriously easing.

 Provided by: Douglas Todd from MSN Money