Chinese investors behind one-third of purchases
Buyers from China made one-third of the purchases in Vancouver’s hot housing market in 2015, according to “back of the envelope calculations” by National Bank of Canada.
Chinese investors spent about $12.7 billion on real estate in Vancouver in 2015, or 33 per cent of its $38.5 billion in total sales, a note by financial analyst Peter Routledge on Wednesday stated.
In Toronto, they made up 14 per cent of purchases.
Routledge compiled the data by extrapolating from a Financial Times survey of 77 high-end buyers and data from the U.S. National Association of Realtors.
National Bank’s analysis follows the federal government’s budget announcement Tuesday that it will spend $500,000 to find ways of tracking foreign homebuyers. Finance Minister Bill Morneau promised the funds to Statistics Canada this year. Some said the money wasn’t enough for a proper search and analysis.
“Investing only 25.7 per cent of the cost of an average price of a detached home in Vancouver is, at the very least, a touch on the low side,” Routledge said in the note. He cautioned his analysis was a hypothetical approach to gauge capital flows, but it pointed to the need for reliable numbers.
Vancouver has long been a target for critics who say offshore buyers, many of whom purchase homes as investments and leave them empty, are pushing prices beyond levels locals can afford and creating ghost towns in neighbourhoods.
Canada Mortgage & Housing Corp. is studying ways to determine numbers of offshore buyers.