How Much of An Impact Do Foreign Buyers have on the Vancouver Real Estate Market? Really?

Foreign ownership of Vancouver Real Estate has been a hot topic in the city for the past couple of years. But what is their impact on housing prices and availability?  Until recently we haven’t had any firm facts, only speculation. However,  Statistics Canada has just captured for the first time the impact of purchases by non-Canadian residents.

The study looked at the metropolitan areas of Vancouver and Toronto, regions that have seen contentious debates about the role of offshore money in the housing markets.

Statistics Canada provides data for 276,274 detached homes in Metro Vancouver, and about one-third were valued at under a million dollars.  Of those 93,511 homes under a million dollars, just 136 of them were in the City of Vancouver.

These figures were published in a joint project with the Canada Mortgage and Housing Corporation, showed that non-residents owned just 4.8 percent of homes in Metro Vancouver. While the percentage of non-resident buyers is still comparatively small, (and hardly worth the attention they have been receiving in the press) there are plenty of interesting facts the study uncovered.

In most cases, the number of non-residents with property in Metro Vancouver is below 10 percent.  But there is one exception: condos built in and around Vancouver in the last two years.

Foreign buyers own about 20% of condos in Vancouver built since 2016. The closer the property is to Vancouver, the greater chance it could be owned by a non-resident. Non-residents made up 7.6 percent of residential property owners in the City of Vancouver, 7.5 percent in Richmond, 6.2 percent in West Vancouver, and 5.0 percent in Burnaby.  But further afield, the figures were 1.9 percent in Pitt Meadows, 2.0 percent in Delta, 2.1 percent in Maple Ridge, and 2.2 percent in the Township of Langley.

Overall, a non-resident property owner in Metro Vancouver is more likely to own a more expensive property than the average citizen. The median value of a single-detached house owned by a resident is $1.26 million, while it’s $1.62 million for a non-resident.

This also varies from municipality to municipality: in the City and Township of Langley, there’s virtually no variation in values in median values between residents and non-residents. But in the City of Vancouver, there’s a 45 percent gap — $3.24 million for single-detached homes of non-residents, and $2.23 million for residents.

But some experts stated the true proportion of foreign-owned properties could be higher. Hopefully, further research will illuminate more details about certain kinds of property ownership arrangements.

For example, a property owned by a B.C.-incorporated shell company with foreign owners would, for the purposes of this month’s release, count as Canadian-owned. It is unclear how many of these residents are around Vancouver and if they are statistically significant.

Another example is if a foreigner buys a Canadian home with money generated overseas, and puts the property in the name of a child attending school in Canada. This would not count as foreign-owned in this initial StatsCan study.

What does this mean ultimately? Are we blaming non-resident buyers too much for the rising real estate prices? Probably. The real estate market is a complicated beast and the price fluctuation isn’t because of one or two factors. There are many things to consider when looking at the housing market and we should be careful when we look for an escape goat.