Is foreign ownership impacting Vancouver House Prices?
With the latest PR disaster by MAC Marketing Solutions where by it’s staff were falsely depicted as foreign buyers of a new development in Vancouver, the debate about the extent of foreign ownership of our Vancouver Real Estate has once again been surfaced.
We all routinely hear of those anecdotes from the real estate observers that foreign ownership is pushing up our prices here in the city, and making our neighbourhood appear haunted with empty properties all over the place.
So do these overseas purchasers invest and leave these homes and condos empty, or are they integrating and becoming new members of the community?
The truth is, we have no concrete statistics. In Canada, we don’t tally the amount of overseas owners or investors.
We do have a couple of sources of information and data that have been compiled by various groups
During 2012, the City of Vancouver started an academic working group which was created under the Mayor’s ‘Task Force on Housing Affordability’. Their task was to determine if Councillor Raymond Louie, who holds the position of the task force’s liaison’s statement that this was “a persistant theme that has been advanced by some”.
The report concluded that considerable investigation and resources would be required for a comprehensive study on the matter, but some interesting things turned up…
Andrew Yan of Bing Thom Architects undertook research pertaining to the energy usage of a selection of Downtown Condos. They assumed that if a condo is empty, then it will consume less electricity than one that is occupied. A refrigerator uses roughly 75 kwh, if a condo is using less than this, we can assume it’s empty. They concluded that 5.5% of the sample was empty for any given month.
They raised the threshold for the power consumption and experienced a change in the results. If they used a 100kwh threshold, then the % of empty condos rose to 8.5%, increasing again to 150kwh brought a potential vacancy rate of 17%.
In conclusion the City’s working group noted that we would need to cross reference data from several different stakeholders, BC Hydro, BC Assessment, provincial home-owner grants and census data. Only then would we be able to build a clearer picture, however the costs associated with doing so would prove probative as it would require a huge level of co-operation between various levels of government organisations to produce the data which may not even be meaningful or relevant.
Landcor Data Corporation figures for 2012 reveal that only 0.2% of people who purchased properties in the Metro Vancouver area last year.
As realtors we often find that many purchasers who are coming from overseas are actually residing in the properties, and building lives here for their families in the same way people who were born in Vancouver do. They are not only paying property taxes here, but they are out in the community, shopping at the grocery stories, buying clothes at the mall, and purchasing cars and other items. This results in more revenue for the province and the government in the forms of taxes, but also supporting the local economy with jobs and other spin off revenues.
Do you think that overseas purchasers are pushing up our prices here in Vancouver? Leave your comment below.