Foreign Purchases of Vancouver Homes Rise Slightly as Market Adjusts to Tax

Date
29.11.2016
Foreign Purchases of Vancouver Homes Rise Slightly as Market Adjusts to Tax hero image
Ministry of Finance shows number of Metro Vancouver home purchases by foreign buyers was up over September – but still way below pre-foreign buyer tax levels

The percentage of Metro Vancouver homes sold to foreign buyers in October was up compared with September levels, as the market continued to adjust to the new foreign buyer tax, according to statistics released November 29 by the BC Ministry of Finance.

Foreign purchasers were involved in three per cent of Metro Vancouver residential real estate transactions in October, which is very close to the provincial average of 2.9 per cent in the same month, said the ministry. This is markedly higher than the 1.8 per cent of Metro Vancouver home sales in September, but well below the 10 to 13 per cent that was typical before the foreign buyer tax was implemented August 2.

In the City of Vancouver, the ministry said that about 2.5 per cent of home sales were to foreign buyers, totalling about 2.8 per cent of the overall value.

Surrey saw just one per cent of all homes being bought by foreign nationals in October, which is the same as in September.

In Richmond, foreign buyers accounted for 6.7 per cent of all residential transactions, which is a rise from the 4.4 per cent of transactions registered in September. Prior to the foreign buyer tax, overseas nationals typically represented around a quarter of all Richmond home buyers.

Burnaby saw about 5.9 per cent of home sales going to foreign nationals in October, which is significantly up from the 1.8 per cent in September.

In Victoria, which does not have a foreign buyer tax, about 6.3 per cent of transactions, representing 10.3 per cent of the overall value, went to overseas buyers. This is up from 3.3 per cent of transactions in September, and up from a typical 3.9 per cent in the months ahead of the tax being implemented.

A statement from the Ministry of Finance said: “There is a period of distortion in the market any time a tax is introduced or changed. Many transactions that would have occurred in the months following the introduction of the tax were moved to July to avoid the tax. As time goes on and the market readjusts, trends such as the rate and volume of foreign demand will normalize to levels we can expect to continue.”

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