The skyrocketing demand for homes and rapid price acceleration is “largely driven by land scarcity and densification policies in the Metro region,” while foreign investment is “insufficient to impact such a large and diverse market,” according to a British Columbia Real Estate Association (BCREA) report published June 10.
The BCREA said that although there was a scarcity of data on the topic, the available information suggests 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.”
It went on to say, “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.”
The report added, “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.”
The BCREA report also poured cold water on the use of average house prices as a measure of true affordability. The report said, “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.”
The BCREA concluded in its recommendations that it “does not see a policy response to curb foreign investment as necessary for the public good at this time.”
However it did recommend the government monitor foreign investment in housing “by attaching a residency declaration somewhere in the land transfer form process, or other practical approach …[in order] to gain further insight into this market segment.”
To read the full report, click here.