VANCOUVER, Canada—Real estate is front and centre in the minds of Vancouverites. It just seems to get hotter and hotter. While everybody can agree on most reasons behind such a robust housing market, one factor—the impact of foreign money—remains a debate.
For starters, the June figures from the Real Estate Board of Greater Vancouver (REBGV) showed sales were 29 percent higher than the 10-year sales average for the month. The benchmark price for all housing is now $694,000, up 10.3 percent from last June. For a detached property, it is up 14.8 percent to $1,123,900.
Always a major factor in determining the health of a housing market is the local economy. And Vancouver’s economy, little affected by the price of oil, is outperforming the rest of Canada. A BMO report on Vancouver’s economy notes that its 6.2 percent unemployment rate is well below Toronto’s (7.1 percent) and Montreal’s (8.3 percent), and that through 2017 it should fall down to just above 5 percent.
Population growth, especially of prime working age people, is also crucial for generating demand for housing. “Population growth in the 30-to-40 age cohort has just reeled off its strongest three-year clip since the end of the 1990s,” according to BMO. And supply isn’t keeping pace in the scarcity of land. Housing starts have been “remarkably stable at around 18,000 units per year over the past five years,” the BMO report stated.
What will also help a housing market is the climate. Being near the mountains and the ocean goes a long way. “We live in a highly desirable region,” REBGV president Darcy McLeod said in a July 3 news release.
Foreign Ownership
The British Columbia Real Estate Association (BCREA) stated in an early June report titled “Market Implications of Foreign Buyers” that foreign ownership of housing is “considerably less than 5 percent of the housing stock and not more than 5 percent of sales activity.”
It’s a statement that most find hard to believe, based on media reports and anecdotal comments.
One real estate agent, who preferred to remain anonymous, said foreign (mainly Chinese) buyers make up more than 80 percent of the luxury market in Vancouver. The agent added that others believe the percentage to be higher. Granted, the luxury market gets most of the attention, but it is a small segment of the market overall.
