Non-residents snap up one in five condos
Government reports re-ignite debate on role foreigners play in red-hot housing markets
In some of Metro Vancouver’s hottest housing markets, at least one in five of the most recently built condo units are owned by people residing outside of Canada.
That number was one of the early findings drawn from the most comprehensive study to date by Canadian government agencies on foreign home ownership in Canada.
On Tuesday morning, Canada Mortgage and Housing Corporation and Statistics Canada released reports comparing non-resident ownership in urban centres.
The reports said non-residents of Canada own 4.8 per cent of residential properties in the Vancouver census metropolitan area. Although that number made Vancouver one of only a few metro areas in the country where foreigners owned more than one per cent of residential properties, that region-wide average was low enough for several observers to say it proves foreign ownership is not a significant factor in the red-hot and increasingly unaffordable housing market.
But those region-wide averages didn’t tell the whole story.
A deeper dive into the data showed dramatically different rates of foreign ownership for certain housing types and municipalities, said Andy Yan, director of Simon Fraser University’s City Program.
Only weeks ago, the City of Vancouver adopted a 10-year housing strategy, which seeks, among other things, to address the housing crisis by dramatically increasing the new supply of so-called “missing middle” housing, including row-houses and semi-detached houses.
But Yan’s analysis showed precise type of housing is owned by non-residents at almost twice the rate of other kinds of homes. While non-residents of Canada own 7.6 per cent of all housing types in the City of Vancouver, the data show they own 12.9 per cent of the most recently built “missing middle” housing.
Of the most recently built condominiums, non-residents of Canada own at least 24 per cent of the units in Richmond, 23 per cent in Coquitlam, and 19 per cent in Vancouver, Yan found.
The creation of more dense housing types like condos and townhouses was intended to help local residents live in denser, more affordable communities, Yan said. But the new data, he said, shows: “If you don’t have some means of throttling demand, you’re really just creating a more efficient investment vehicle for foreign and domestic speculators.”
And now, as policy-makers, including Vancouver city hall, consider supply and demand in the housing market, they will want to analyze Tuesday’s data, said Eric Bond, CMHC’s principal market analyst for Vancouver.
“Absolutely they will be looking at this. I don’t want to speculate on what they might do, but this type of info didn’t exist before, and actually it didn’t exist when some of those policies were being developed,” Bond said.
Asked whether 20 per cent of certain newly built housing types going to foreigners is enough to influence prices across the broader market, Bond said “That’s the big question everyone has, and it’s one that we have as well, and one that many policy-makers are interested in, so we are working on it.”
“Cities like Toronto and Vancouver are on the global real estate map,” Bond said. “And these are ultimately questions that the electorate in each country and each city will have to decide how they want to approach it ...”
For Nathanael Lauster, an associate professor of sociology at the University of B.C., the data confirms a narrative that several housing commentators have held for some time — that foreign ownership is not really driving the rocketing prices.
“There are a lot of people who pretty much say it’s all about foreign buying and I think that this is another data point that really challenges that idea,” Lauster said Tuesday.