Foreigners are quite often blamed for Vancouver’s expensive housing market. Stories abound that they’re snapping up properties everywhere, pushing prices beyond the reach of many locals.
Rosario Setticasi hears this kind of talk from time to time. The real-estate broker/manager finds it an interesting discussion because it provides an easy answer as to why homes are so costly in the Lower Mainland.
But as the president of the Real Estate Board of Greater Vancouver, Setticasi sees numbers that don’t seem to square with this particular notion.
According to him, the REBGV does a small survey of 250 to 350 of its more than 10,000 realtor members each month to find out who their buyers were. He noted that foreigners don’t account for a lot.
“Over the years, we always see those numbers fluctuating anywhere between two percent to a high of six percent every now and then,” Setticasi told the Georgia Straight in a phone interview. “You don’t see that six percent of the sales going to foreign investors too often. But, generally speaking, it’s around two percent, two-and-a-half, three percent.”
In January, for example, Lower Mainland realtors told the association survey that 3.9 percent of their buyers that month were from outside Canada. Setticasi also recalled that in December last year, the number was lower, 2.5 percent. In November, it was 5.6 percent. About 4.5 percent of buyers in October were foreigners.
According to Setticasi, it’s Canadian first-time buyers who are actually the strongest drivers of the market. Based on survey responses, they typically account for at least 30 percent of purchases. The REBGV president suggested one explanation for why talk persists about the effect of foreign purchasers.
“It is possible that in some areas, there may be a greater amount of sales—when you look at Vancouver West Side, for instance,” he said. “You do have a heavier influence from foreign people…within that area. Or West Vancouver, or perhaps Richmond.”
Last year, the Vancouver-based think tank Urban Futures looked into the matter of foreign investment in the housing market in the Lower Mainland. The group used numbers compiled by the Landcor Data Corporation and focused on the addresses to which property assessments are mailed. The premise was simple: if an assessment was sent overseas, then the owner must be a foreign investor.
According to Urban Futures, 195 residential properties either were purchased by people outside of the country or had their assessment notices mailed outside of Canada in 2010. That’s 0.4 percent of the total of 55,512 homes sold in the region that year.
In 2009, foreign buyers took 0.6 percent, or 360, of the 63,226 homes sold in the Lower Mainland.
“It is also worth noting that foreign investors currently own a mere 0.5 percent of the total stock of 774,600 residential properties in the Lower Mainland,” Urban Futures reported.
But according to Central 1 Credit Union economist Bryan Yu, keeping track of foreign addresses on property assessments doesn’t provide a complete picture. He suggested that it’s possible that some of these documents are being sent to local representatives of these buyers, like law firms or property managers.
He said there is no system in place to reliably monitor foreign ownership. “You don’t see a lot of information on that, so there’s really no hard answer in hard numbers in terms of a percentage,” Yu told the Straight in a phone interview.
However, Yu pointed out that there is a “disconnect” between the high prices of homes in Metro Vancouver and the incomes of locals.
“There is a lot of ownership by individuals who migrated here, who moved here already,” Yu said. “Whether or not incomes are generated here…to make this purchase, that’s another question. So it’s possible that we actually do see individuals who immigrated here but some of the incomes may not be generated here in Canada.”