Foreign nationals account for 5% of Metro Vancouver purchases
JOANNE LEE-YOUNG AND ROB SHAW
The Province
Critics slammed the B.C. government’s new data that foreign buyers account for five per cent of Metro Vancouver home sales, saying it misses the impact of offshore capital.
“The important question is not who is buying, but where the money is coming from,” said University of British Columbia associate professor Tom Davidoff. “If Vancouver is becoming a hard place to work and live, and if people who are permanent residents and citizens — with (overseas sources of ) cash from relatives, business associates or themselves — are buying homes, it still poses a challenge.”
On Thursday, the provincial government unveiled its first set of information based on sales from June 10 to 29, when it started to collect information about the citizenship of homebuyers who are not Canadian citizens or permanent residents.
It said foreign nationals accounted for five per cent, of just over 5,000, Metro Vancouver home sales worth $5.4 billion, even though they bought more expensive homes than Canadian citizens and permanent residents. Buyers from China made up 90 per cent of those 259 foreign national buyers.
The average value of a home bought by these foreign nationals in Metro Vancouver was $1.35 million compared to the average of $1.04 million that a Canadian citizen or permanent resident spent.
Across B.C., out of just over 10,000 transactions worth a staggering $7.6 billion during these three weeks, about three per cent of the sales, worth $390 million, were by foreign nationals.
B.C. Finance Minister Mike de Jong, who announced the information Thursday, cautioned that the information is based on sales for just under three weeks and the sample loosely represents about 10 per cent of projected total home sales for 2016.
He acknowledged June 30 is a day when a significant number of home sales would have closed, but didn’t fully explain why the government chose not to wait and include it.
De Jong broke down the numbers in four communities: In Metro Vancouver, foreign nationals accounted for five per cent of transactions of which 234 transactions were by mainland Chinese buyers, followed by five by Korean, five by Taiwanese; City of Vancouver, foreign nationals accounted for four per cent; Richmond, foreign nationals accounted for 14 per cent; Surrey, three per cent; Burnaby, 11 per cent. (Source: B.C. Government)
In fact, June 30 was a record day of activity covering residential, commercial and industrial properties, going back to the last downturn in 2008, according to the Land Title and Survey Authority of B.C.
“What do people take from this (new data) with all the limitations and caveats I’ve attached?,” asked de Jong.
“We know with certainty there are foreign nationals from countries around the world purchasing residential properties in B.C. We know that as a fact now and are beginning to be able to quantify that. We know that at the head of that pack, the largest group certainly for the period we studied was from China,” he added.
“We have to be careful of the conclusions we draw about relative values. For the period we’ve studied, it appears that foreign nationals are purchasing at higher values than the average Canadian citizen.”
The move by the province to return to collecting data on foreign buyers followed public outcry that offshore money is contributing to skyrocketing real estate prices.
Opposition NDP Leader John Horgan brushed aside de Jong’s statistics, saying government should be looking at who is declaring income in the province and following the money rather than relying on self-reported citizenship data.
“I think they are lowball figures and I think there are other ways to arrive at this information, and that would be by using the Income Tax Act,” said Horgan.
Main findings include that there were 10,148 residential real estate transactions in B.C., totalling more than $7.6 billion. Of those, 337 transactions (3.3%) involved foreign nationals, worth $390 million (5.1%). In Metro Vancouver, there were 5,118 transactions worth nearly $5.4 billion, of which 260 involved foreign nationals (5.1%), worth $351 million (6.5%) In the City of Vancouver, there were 1,139 transactions, totalling more than $1.6 billion. 47 of these involved foreign nationals (4.1%), worth $64 million (3.9%). (Source: B.C. Government)
Horgan called it “troubling” that the five per cent of foreign purchases in Metro Vancouver account for more than $390 million in sales.
“After 19 days of data the Minister of Finance has discovered almost $400 million came from somewhere else for the express purpose of alienating British Columbians from the housing market,” he said. “That’s $400 million worth of activity that is not being participated in by the people who live here. And I think that’s a challenge.”
He reiterated the NDP’s position to tax foreign speculation through a program that would exempt those who declare income and pay taxes in B.C., accusing the Liberal government of fiddling around the edges of that issue.
“They spend more time talking to those who are investing in the B.C. Liberal Party than those who want to invest in putting down roots in the Lower Mainland,” he said.
The government’s single-digit percentages are in keeping with some past surveys, including one in June 2015 by the B.C. Real Estate Association for Metro Vancouver, which said foreign buyers account for no more than five per cent of sales.
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