Owning a detached house in Vancouver has never been so unaffordable; according to a new report from last month’s Multiple Listing Service (MLS) sales data, analyzed by research firm Snapstats. The study reveals that by the end of the month, sales of downtown Vancouver condos and townhomes just under $600,000 were dramatically outpacing new listings. The same holds true for attached properties at the $700,000 mark on Vancouver’s east side. In other words, the lack of supply is accelerating prices to new heights.
Plenty of blame to go around
Offshore money, absentee landlords, and even ‘shadow-flippers’, all get blamed for putting home-owning dreams out of reach. Until recently, the BC government refused to recognize there was even a problem – shrugging it off as “collateral damage” from expanding the BC economy. Any suggestion that foreign investors, mainly from China, were fuelling the unconscionable rise in house prices was dismissed as data-less hyperbole.
All of a sudden, there has been a dramatic turnaround on the issue. It’s almost as if the BC government, and the new federal Liberal authority in Ottawa, realize that housing affordability is no longer merely a concern, but a genuine provincial crisis.
Canada’s Investor Immigrant Program
Canada’s investor immigrant program required individuals with a minimum net worth of $1.6 million to loan Canada $800,000; it attracted 36,973 immigrants to B.C, two-thirds of whom came from mainland China. The program has since been changed to allow only 50 applicants a year.
Largely as a result of governments’ efforts to attract wealthy immigrants and investment from Hong Kong and Taiwan in the 1980s and 1990s, and in Mainland China since 2000, the inflated housing prices are devastating for young and middle-aged Metro Vancouverites trying to make homeownership a reality in BC.
Even though the Conservative government closed the business-immigrant scheme in 2014, affluent ethnic Chinese eager to buy real estate continue to move to Metro through the back door of Quebec’s business-immigrant program.
On March 24, 2016, National Bank financial analyst Peter Routledge calculated that Chinese home buyers may have bought as much as 33% of the total housing volume in Vancouver, last year.
Routledge’s report came just after the federal government earmarked $500,000 for Statistics Canada to study the impacts of foreign ownership in Canada’s real estate market. The BC government also announced earlier this year it is studying the level of foreign ownership in the province’s housing markets to try and combat the crisis.
