Foreign buyers still active in Metro market

But figures show decline in transactions

Foreign buyers accounted for six per cent of the value of residential property purchased in B.C. over the past year, according to the latest data released Wednesday by B.C.’s Ministry of Finance.

The figures show the government took in $102 million in revenue from the foreign buyers tax from Aug. 2, 2016 to March 31, 2017.

The government started collecting foreign buyer data in June 2016, and abruptly introduced a 15 per cent tax on the purchase of residential real estate in Metro Vancouver in August 2016.

Despite the tax, the majority of B.C. foreign buyer transactions from June 2016 through May 2017 — $3.27 billion worth — happened in Metro Vancouver.

The share of sales volume involving foreign buyers plunged from 16.5 per cent in Metro Vancouver in June 2016 to four per cent in January 2017.

In Richmond, 27.2 per cent of total sales involved foreign buyers in June 2016. The figure plunged to 1.3 per cent in August 2016 and bounced back to about 10 per cent per month through most of 2017. From June 2016 through May 2017, the cumulative value of all property purchases in Richmond involving offshore buyers was 12.6 per cent.

But that is only for the offshore buyers the government knows about, NDP MLA David Eby said.

Eby said a 2016 Transparency International study showed 50 per cent of the top 100 most expensive properties in the City of Vancouver are owned through obscure methods such as offshore trusts, shell companies, or students or housewives represented on land titles.

Last August, while sales crashed across Metro Vancouver, Langley realtor Danny Evans predicted to Postmedia a swift bounce back in “under the table” sales from offshore buyers arranged through “side deals for the people that are going on the title (as owners).”

“The Chinese market is still very strong and the prices have held,” Evans said Wednesday. “The Chinese buyers are very adaptable, and I think people are using companies to buy homes now.”

David LePoidevin, the founder of a Vancouver portfolio management firm, said he believes recent sales and price increases in Metro Vancouver’s housing market could be attributed to foreign buyers who returned to B.C. after Ontario introduced its foreign buyer tax in April 2017.

“I talk to realtors in Richmond, and they are saying the foreign buyers are back. The clients are saying, ‘If I’m going to pay a tax in Ontario, I’d rather buy here.’ ”