The Ministry of Finance has released updated figures for foreign money spent purchasing Metro Vancouver and B.C. real estate.
During a five-week period, June 10 to July 14, foreign nationals accounted for 9.7 percent of residential real-estate transactions in Metro Vancouver and 6.6 percent of sales across the province.
Those numbers are up from previous statistics for the first three weeks of the period analyzed, when they were recorded as 5.1 percent of Metro Vancouver sales and three percent of B.C. sales.
Equally significant are differences that appear in the data when it is analyzed in terms of the values of investments as opposed to numbers of transactions.
According to three weeks of data, foreign buyers accounted for 6.5 percent of the total dollar value of Metro Vancouver sales and five percent of the value of sales across B.C. But according to five weeks of data, those numbers are 10 percent and 7.9 percent, respectively.
The appearance of such large discrepancies in a short time frame suggests it could be a while before British Columbians can measure the impact of foreign money in real estate with any degree of accuracy.
The province’s first batch of data on foreign buyers was released on July 7. This second set is the first to come after a July 25 announcement wherein the government said it would begin hitting residential sales to foreign buyers with an extra 15-percent tax.
The new numbers make clear the tax could be a highly lucrative revenue stream for the provincial government.
During the five weeks analyzed, foreign buyers spent $1.02 billion on B.C. real estate.
If the new 15-percent tax does not result in a decline in foreign-investors activity—similar measures implemented in jurisdictions such as Australia suggests the tax will have a negative impact on foreign investment, but for the purpose of this estimate, we’ll say it will not—the money spent in those five weeks is the equivalent of $10.65 billion a year.
A 15-percent tax on $10.65 billion a year equals an estimated $1.6 billion in new annual revenue for the provincial government.