Foreign ownership is a frequent topic of conversation in Vancouver. We are all curious to what extent these purchasers affect our market. The exact numbers are difficult to uncover, as sometimes foreign buyers will use a local proxy to make their purchases, but a recent report from Statistics Canada gives us an idea of how ownership in Vancouver is divided. StatsCan claims non-residents own 36,541 homes, which account for 4.77% of homes in the Metro Vancouver area.
What is a non-resident? StatsCan defines a non-resident as an owner who has their primary residence in a country that isn’t Canada. This definition accounts for the foreign buyer that many Vancouverites imagine, the speculator purchasing Canadian properties with no intention to occupy these homes, only use them as investments. However, this definition can also include Canadian expats who have left the country for an indeterminate amount of time and still own Canadian properties, which is important to keep in mind.
For a more nuanced understanding of foreign ownership, we can look at how many new-build properties are purchased by non-residents. 768 of the COV’s 4,451 homes built in 2016 and 2017 went to non-residents, which accounts for 17.25%. If we look at Richmond, an area commonly associated with foreign ownership, 425 of the 2,189 homes were bought by non-residents. This type of ownership has increased in recent years and shows no signs of slowing.
StatsCan estimates non-residents currently hold around $45 billion of residential assets. The total residential market in Vancouver is valued at around $889 billion. To put that ratio in perspective by looking at another major Canadian housing market, we see that non-residents own a little more than $37 billion in Toronto.
This is a very complex issue, and it’s important to assess the data without a knee-jerk response. This topic is controversial but there’s no easy answer. It’s significant that around one in five new build homes are being purchased by people who reside outside the country, yet there are also other variables that affect housing affordability. These variables include how quickly development permits are issued, restrictions on density, and mortgage stress tests.
If you have any questions about the influence and scope of non-resident buying, I’d be happy to talk about particular areas or the city as a whole. Vancouver is a highly sought after market, and it’s not surprising that it is a popular city for both speculators and full-time residents.
Picture Source: CBC News
