Foreign buyers, including a large number of Chinese investors, make up about one out of 20 homebuyers in Vancouver, according to research conducted by British Columbia’s finance department. This has seen the costal city become Canada’s most expensive housing market and made it the another hotspot for Chinese investment.
Bloomberg reported that a recent government report on the topic found that foreign nationals — those who said they aren’t Canadian citizens when filling out a tax form — accounted for nearly five percent of real estate transactions and 6.5 percent of the total value of deals in Vancouver, with the majority of the deals involving Chinese citizens.
“There’s certainly a presence,” B.C. Minister of Finance Michael de Jong said. “It is real, it is actual, it is factual and it is beyond conjecture, theories and speculation. I attach importance to the data and we’re going to approach it with an open mind.”
Politicians, residents, international groups and analysts in British Colombia have long complained about the skyrocketing home prices which are setting record highs. The benchmark home price in Vancouver rose 32 percent y-o-y while the average price of a single-family detached home increased 39 percent y-o-y. The city’s real estate board is predicting for both of these prices to continue rise.
Consulting firm Demographia ranked Vancouver as the third least-affordable housing market in the world this year behind both Sydney and Hong Kong, two other markets where foreign investors are prevalent. Bloomberg added that this was the eighth straight year the city occupied a top-three spot on Demographia’s list.
For years Vancouver’s tech and new media sectors have spurred the region’s economic growth, but talent and companies are now leaving the city for more affordable destinations including the nearby cities of Victoria and Kelowna. This drain is not unique to Vancouver and can be found in other cities where home prices are steadily rising.
