Questions arise over extent of foreign residential sales

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.”




Feb 29, 2012 at 12:47pm

The question is not whether the owners are foreign, the question is where they generate their income or how much money they came with. Many families in BC draw on the medical and education system while having at least one family member overseas earning and sending money. These families aren't considered foreigners but their incomes are also not subject to the same level of taxation BC'ers experience and are earned in a different legal and social climate.

John Simpson

Feb 29, 2012 at 12:47pm

This is a methodologically poor article.

For one, the sources are talking about the percentage of the buyers who are foreign, not the percentage of the total value of the housing purchased by foreign buyers. Property in West Vancouver and downtown where rich foreign nationals are likely to buy is far more expensive, so these purchases do indeed push up real estate prices.

Second, looking at data from the last few years, such as 2009, doesn't matter much. Since the financial crisis the rise in real estate prices has slowed.

Looking at the data from the early 2000s, where the real jumps in prices occurred would be a far better way to address this question.

Good on Charlie to question the assumptions that are out there (and the subtle racism often lurking underneath), but this article needs a bit more research!

David Wong

Feb 29, 2012 at 1:14pm

This real estate "info fact" is nonsense.

First of all, one has to quantify 'what a foreign buyer is'. As far as I'm concerned, a foreign buyer is a person who doesn't live nor contribute to Canada. Though there are many new Canadians who participate in community building... there are some with the resources to work the system. These are the characters this "real estate study" misses.

I don't care if they have "Canadian citizenship"... citizenships can be bought a la immigrant investment schemes (blessed by our elected leaders). Once some of these people obtain their citizenships, they leave Canada and perhaps, return on the odd occasion to feed off our generous social system. (Remember Diane Francis calling Canada "a nation of Suckers")

Two years ago, I met a fellow from China who bought 23 homes in Vancouver. My new Canadian friend became a Canadian citizenship after "doing his time here" (his words). He does''t contribute much to our tax system ... doesn't vote... hell... doesn't contribute to Canadian society at all. As far as I'm concerned, he's still a foreigner. I'm sure his stats won't register in the real estate survey findings as a foreigner.

Meantime, my kids, who are multi-generational Canadians will be tenants in the country their ancestors helped build... because our elected officials are too weak bladdered to say anything, cuz they only wake up between vote shopping efforts during election calls.


Feb 29, 2012 at 1:25pm

Is there really a question of foreign (read Chinese) sales? Total bullshit, I know several realtors on the west side and they tell me that 3 out of 4 homes are sold to asian buyers, and when the properties go into the millions (5+) the percentage of "overseas investors" is even higher.

Taxpayers R Us

Feb 29, 2012 at 2:31pm

Amen David, amen.


Feb 29, 2012 at 3:52pm

"The group used numbers compiled by the Landcor Data Corporation and focused on the addresses to which property assessments are mailed."
Really? So some wealthy dude in China who owns twenty or thirty condominiums in Vancouver is just sitting over there waiting for twenty or thirty tax assessments to show up in his mailbox? Like a neon sign for the Chinese government: "Rich speculator in undeclared foreign property lives here!" Get a grip! What's happening here is like a farmer putting a fox in charge of the chicken house. Then, when the chickens start to disappear, asking the fox if he knows anything about it! What do you think the answer is going to be??? What if the real estate industry told the truth and said 50-60% of sales are to foreigners - think something might happen then? Of course it would! So better to lie or make up goofy statistics! Bottom line is, we Canadians can see what's happening with our own eyes.The city is being sold out from under us to foreigners so developers and marketers can get rich. Period.


Feb 29, 2012 at 3:57pm

David Wong, you said everything I would have said only more eloquently.

Save Vancouver

Feb 29, 2012 at 10:20pm

Well thank goodness its "only" Vancouver, West Vancouver and Richmond that might have foreign buyers distorting prices.

Like others have said, its not rocket science to go to any Open House in those areas and figure out where the buyers are coming from.


Feb 29, 2012 at 11:28pm

A question: If someone owns a number of properties and uses them as rentals, the rental income is taxable in BC. If someone lives in BC and takes advantage of our health care system, he or she has paid MSP. If someone lives here and sends their kids to local schools, they're paying the property taxes that support those schools and provincial tax on purchases and any income they make while they're here. So, given all of that: What does it matter where they're from? And why are foreigners paying the same taxes as the rest of us labelled freeloaders who don't pay their fair share?


Mar 1, 2012 at 5:56am

@Morty...there's a lot of "if's..." in your question! The big issue here is the affordability of Canadian real estate for Canadians, specifically in reference to foreign speculators who are not Canadian, do not live here, and have no intention of living here. Those foreign owners may pay taxes relevant to their Canadian real estate holdings, but they don't pay Canadian income tax or any of the other taxes required to build and support the infrastructures that you and I pay taxes for. When their Canadian real estate holdings have increased enough in value (far beyond what they had to pay in taxes), they sell, having contributed nothing to this country except higher real estate prices for Canadians. That is the issue.
If you, on the other hand, feel you don't pay your fair share in taxes (as per your final sentence), feel free to pay more! You are anyway if you own property, thanks to escalating real estate prices. This whole thing would be solved by a 25% sales tax on property sold to, or by, foreigners.