Vancouver

Foreign Buyers Own $45.25 Billion Worth of Vancouver Real Estate

Foreign Buyers Own $45.25 Billion Worth of Vancouver Real Estate

It’s been long rumored that Vancouver real estate was being picked up by overseas buyers. Numbers from Statistics Canada (StatsCan), Canada’s national statistics agency, confirm this. The agency led with a substantial rate of non-resident buyers, but the numbers seemed much lower than people were expecting. A closer look at these numbers however, reveals a much more complicated story. Substantial portions of new construction are being consumed by foreign buyers. This places much more pressure on today’s buyers, that have to compete with deep pocketed investors looking for second homes.

Non-Residents, and About The Data

Let’s start with the definition of a non-resident, so we’re all on the same page. A non-resident owner is someone who has a primary residence in another country. This could be a foreign buyer that’s never set foot in Canada, using the property strictly as an investment. It also includes Canadians that owned, and picked up to move elsewhere. Ruthless speculator buying homes to hold and keep empty for appreciation? Non-resident owner. Canadian that keeps their home while they work in the US for a few years? Also non-resident.

Unfortunately this is the first set of data, so we don’t have a time series to compare. What we can do however, is isolate these numbers to see how newer built units are being absorbed by non-residents. This isn’t a perfect method to determine growth, but it’s the best we have since we waited so long to collect this kind of information. We’re definitely looking forward to the next set of numbers, but in the meantime – here’s what we’re seeing.

Non-Resident Owned Homes Account For 4.77%… Kind of

The rate of homeownership by non-residents was high, but not as high as people expected. StatsCan found non-residents owned 36,541 homes, which is 4.77% of homes examined in Vancouver CMA. Breaking down the City of Vancouver, non-residents owned 14,310 homes, a rate of 7.61%. Richmond saw non-residents own 5,265 homes, a rate of 7.47%. These numbers are high, but are low compared to the current land registry numbers. That’s because new builds weren’t isolated.

Source: Statistics Canada.

Isolating properties built from 2016 to 2017, really highlights how foreign buying became out of control. Vancouver CMA saw 1,943 of the 16,188 homes go to non-residents during the period, a rate of 12%. The City of Vancouver more specifically saw 768 of the 4,451 homes go to non-residents, a rate of 17.25%. Richmond saw 425 of the 2,189 homes go to non-residents, a rate of 19.42%. Turns out Vancouver might be building a decent amount of supply, but up to 1 in 5 units gets bought by non-residents.

Source: Statistics Canada.

Non-Residents Own $45.252 Billion Worth of Vancouver Real Estate

The total dollar value of non-resident owned homes is also pretty mind blowing. StatsCan estimated non-residents held $45.252 billion of the $889.109 billion residential real estate market in Vancouver CMA. That works out to 5% of all dollar value across the region. Breaking that down, non-residents in the City of Vancouver owned $22.338 billion in homes, about 7% of the total value. Non-residents in Richmond owned $4.859 billion in homes, about 6.66% of the total market value. To contrast, non-residents owned $37.37 billion worth of Toronto real estate.

Source: Statistics Canada.

Now, no one’s really quite sure how much is an acceptable amount of foreign buyers. However, I seriously doubt almost 1 in 5 new builds is an acceptable number. Best case scenario, this means up to a fifth of the new housing supply is being consumed by those wealthy enough to own a second home. This is before we include any domestic speculators, that are adding another layer of pressure.

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21 Comments

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  • Reply
    Zack 10 months ago

    Vancouver needs to ban foreign ownership, like New Zealand did. Banning immigration, that could be considered racist. Banning someone from getting a second or third (of 100th) home, in prime real estate in a major city where people need to work and live? That’s just sensible planning.

  • Reply
    Maio 10 months ago

    This is a total failure from Richmond city council. Preserving Chinese-Canadian and new immigrant rights to shelter? All for it. Protecting the rights of people speculating at the cost of a city’s livelihood? It’s just disgusting. Someone needs to purge all of BC of self-serving politicians.

  • Reply
    Deal With It 10 months ago

    Foreign buyers are a part of Vancouver’s city now, and created a lot of wealth for locals. Every generation has it’s wealth windfall. For us homeowners, it was real estate. For you, it’s crypto. Quit whining and start investing.

    • Reply
      Rui 10 months ago

      do you honestly think this is a sensible response? or are you just too dumb to see the problem? Foreign buyers are NOT part of the city… for that to happen you need to live there a substantial part of them and actually pay into the city. This is questionable. The idea of foreign buyers also buying a home to live in is also questionable – speculation is probably more like it… something that investors preach like crazy but have no real idea of the actual cost of this activity. Citizens of the state need to live and work there. Foreign buyers could care less. This should be the line to draw and kick them out. Speculators of all types also need to be curtailed but that is a bigger problem to track.

    • Reply
      MH 10 months ago

      This comparison of housing with crypto says it all, and further strengthens the case for regulating all kinds of speculators (foreign and local) out of the housing market. Hopefully it will be dealt with accordingly.

    • Reply
      Here, Here, 10 months ago

      I agree 100%…..I recall the 90’s when Vancouver was a struggling city. Now it’s part of the World stage and ALL that comes with it. People are myopic in their views of economy. How can you stop people from wanting to buy into this city? Why would you want to ? People never saw real estate as an investment option prior to the 2000’s…..Now they complaining when they cannot get in.

      Ban on Real Estate investment in New York? Nope..London? Nope? Paris? LA? Honk Kong? NOPE NOPE NOPE…Get with it people.

  • Reply
    Rui 10 months ago

    And to think conservative pundits kept saying 5% is not enough to affect the market so quit the whining. A*holes. Percentages are used to hide the real activity as is being shown here. And narrowing it down to location is also key. The fact that the majority of the buying is happening in areas close to where citizens need to work effectively blocking citizens from housing conducive to a work environment is part of the problem. Something the conservative minded fail to grasp – they say just move to cheaper housing – sure where the commute is usually more than 1 hour one way… yeah sure. blow me.

  • Reply
    bluetheimpala 10 months ago

    I’m from Toronto so I don’t have first hand knowledge of your market.

    Isn’t the issue not the % of the housing they own but their impact and potential manipulation of the market?

    Take a 3 party scenario. 2 parties know each other and wants to manipulate the market, A + B. 1 party does not,C. A + B are wealthy or have a pool of other peoples money and understand the prime land banking, ‘drive up the price’ climate (BD has broken it down before). Similar to previous markets, like south florida, they go in with sacks of cash. Buying and selling to each other, driving up the price. (On a side: I observed a family in brampton sell a house back and forth between 4 families before going back to the original). Now, price is only one factor; mortgage fraud is the other. A + B are going back and forth; getting over inflated mortgages, extracting some cashflow until the picking is right and they off load to a local or any other sucker (other foreigner who wants to replicate the success). At the end of the cycle they’ve extracted hundreds of thousands of cash through fraud, inflated the housing market and still sold out and made money off of the asset (remember they started the increase and know when it will end).
    Maybe not, what do I know.

  • Reply
    Mike 10 months ago

    I see lotsa old white folks in shiny new trucks and SUVs these days. Lotsa money to give kids as downpayments etc. Wonder how that happened?

  • Reply
    Mike 10 months ago

    I wouldn’t mind banning immigration as long as I get a white lady to wipe my ass when I get old

  • Reply
    Vkob 10 months ago

    How about this? We tax properties based on the amount of income, and associated income tax, it would take to own that property. Additionally, we take on the CPI basket of goods and take the sales tax for yearly purchases in the basket of goods at a ratio of 1.5 persons to bedrooms in a home.

    All of this tax is deductible against income tax or, in the case of retirees with homes that are now expensive, deferrable until sale or death.

    Problem solved. Also I’m happy to accept any hard working immigrants. Shit even average working immigrants. Vancouver was multicultural before the Olympics and before EXPO 86. Rich Chinese people just massively changed the economic and cultural landscape of this city, and not for the better? You think that’s racist? Find me the social positives in “Rich Asian Girls of Vancouver”…

  • Reply
    Mark 10 months ago

    Hmm. I sold my condo last year and made 100% profit. Took a job in Kamloops and bought a nice place here. Thanks foreign buyers!

  • Reply
    Octave 10 months ago

    I wish to buy a house in Vancouver and let my parents (who retired after working for decades in Vancouver) to live there. I moved to US to get better job. I have non-resident status but I don’t see myself as the same as other non-residents who bought houses for investment purpose if I own a home in Vancouver.

    • Reply
      DeAris Azoth 9 months ago

      Im considering investing in Canada too then I want to buy a home for myself after the money from my flips pay for my home. My canadian friend sent me a website that have a list of foreclosures that he purchase property for dirt cheap http://bit.ly/2BeBEsU. Im looking for anyone who have pruchased this and if not then I will in a few days.

  • Reply
    Octave 10 months ago

    Tax the profits gained from flipping houses like a regular income tax if the owner flip in less than 3 years.

  • Reply
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