Photo: James Bombales
Contrary to popular belief, foreign buyers in Greater Vancouver are more likely to own a condo-apartment rather than a single-family home.
As of June 2017, foreign buyers owned 4.8 per cent of residential properties in Greater Vancouver, according to Statistics Canada’s Canadian Housing Statistics Program, published on Tuesday.
Foreign buyers owned 3.2 per cent of single-detached homes and 7.9 per cent of condos in the region.
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"I don't think people necessarily fully expected that [fact] and that was pretty striking,” Tsur Somerville, a University of British Columbia professor of real estate finance, tells BuzzBuzzNews.
The data is part of Statistics Canada’s first release from the joint program with the Canada Mortgage and Housing Corporation. The framework was designed to address data gaps on estimates of non-resident ownership in residential real estate.
Statistics Canada defines foreign ownership as the non-Canadian residency of the legal owner of a property, irrespective of the owner’s citizenship.
While almost two-thirds of non-resident owned properties were condos in the region, 50.1 per cent of the foreign-owned condos were in the City of Vancouver, while 14.9 per cent were in Richmond.
Vancouver realtor Steve Saretsky says he understands why foreign buyers are opting for condos because of the affordable price options and lower upkeep levels required compared to detached homes. However, as someone who is actively involved in the market, Saretsky says the share of foreign buyers who own detached properties is lower than expected.
"One thing that sticks out to us [realtors] is they like single-family homes in the west side of Vancouver. That's a very niche product that is almost entirely dependent on foreign income,” Saretsky tells BuzzBuzzNews.
Somerville says another surprising detail from Statistics Canada was the distribution of foreign ownership within the region.
The City of Vancouver had the largest concentration of non-resident ownership with 7.6 per cent, followed by Richmond with 7.5 per cent and West Vancouver with 6.2 per cent. In the suburban cities surrounding Vancouver, including Surrey and Langley, foreign ownership was between two to four per cent.
Although the data is a step in the right direction, Saretsky says it does have some limitations.
Since the data collection only began this in summer 2017, the realtor says there’s no way to determine if the percentage of foreign buyers has grown in recent years, which he believes is the case.
Saretsky also notes that the data doesn’t consider the amount of non-resident ownership in the pre-sale condo market, which could account for a significant amount of foreign investment.
"I think there's been a huge appetite for foreign owners to buy these pre-sale units, especially if you're living overseas. It's easier to get your hands on from over there,” says Saretsky.
Both Somerville and Saretsky agree that more research should be done on establishing how many foreign buyers are renting out their properties. In addition, speculation by non-residents should be tracked in an effort to reduce empty homes in the region.
As for foreign buyers’ contribution to the region’s skyrocketing home prices, Saretsky says the data suggests the root of the cause might be more local than expected.
"I think at the end of the day, locals don't get enough credit for driving the prices up themselves,” says Saretsky.