Housing affordability has long been a thorn in the side of the Metro Vancouver story. Indeed, the rapid acceleration in home prices that occurred during the 2002-2008 period still has many people gobsmacked. Recent news stories have focused on the foreign buyer segment of the market, concluding that foreign investors are unduly inflating home values and driving potential domestic buyers out of the housing market, especially those looking to purchase their first home.
However, there are data and analyses from a number of sources that point to foreign investment as insufficient to impact a market as large and diverse as Metro Vancouver, save for a small segment of luxury homes. In addition, significant upward pressure on single detached home values is largely driven by land scarcity and densification policies in the metro region. These efforts have achieved relative stability in the values of apartments and townhouses that now comprise two-thirds of the housing stock.
The British Columbia Real Estate Association (BCREA) finds that:
• While no hard number on foreign buyers in Metro Vancouver housing market exists, the available data and analysis on the housing stock and flow of residential transactions in the region suggest that foreign ownership of housing is considerably less than 5 per cent of the housing stock and not more than 5 per cent of sales activity.
• The proportion of vacant dwellings, as well as the proportion occupied by foreign and/or temporary residents in the Vancouver CMA during the 2011 Census, did not diverge significantly from other large Canadian or provincial urban centres.
• Domestic investors are three to four times more active in the region’s housing market than foreign investors, adding much needed rental accommodation supply. In addition, adjusting for inflation and wage growth, apartment condominiums have become more affordable over the past five years. Further, relatively stable prices have provided little incentive for short-term speculative activity in the apartment market segment.
• The single-detached home stock has declined in both absolute and relative terms in the Vancouver CMA. This
increasing scarcity has led to significant price appreciation as consumers compete for the available stock.
• Regional residential densification efforts have led to relative price stability in multi-family housing over the past five years, as home builders have kept pace with demand. Multi-family housing now comprises two-thirds of the Metro Vancouver housing stock and approximately 80 per cent of new home construction activity.
• The average home price in the region is an inadequate yardstick for housing affordability. Nearly 70 per cent of
all MLS® residential transactions in Metro Vancouver during 2014 were below the average price of $738,000, with 32 per cent of homes sold below $400,000 and 82 per cent below $1 million.
1. BCREA does not see a policy response to curb foreign investment as necessary for the public good at this
time. The available evidence of foreign investment into the Metro Vancouver Housing market suggests that it
represents no more than approximately 5 per cent of market demand and that housing affordability in the firsttime
buyer segment of the market has not been negatively affected.
2. BCREA recommends the government monitor the flow of foreign investment in housing by attaching a residency
declaration somewhere in the land transfer form process, or other practical approach. Gathering data on foreign
investment in housing would provide an opportunity to gain further insight into this market segment.