It’s been long rumored that Vancouver real estate was being picked up by overseas buyers. Numbers from Statistics Canada (StatsCan), Canada’s national statistics agency, confirm this. The agency led with a substantial rate of non-resident buyers, but the numbers seemed much lower than people were expecting. A closer look at these numbers however, reveals a much more complicated story. Substantial portions of new construction are being consumed by foreign buyers. This places much more pressure on today’s buyers, that have to compete with deep pocketed investors looking for second homes.

Non-Residents, and About The Data

Let’s start with the definition of a non-resident, so we’re all on the same page. A non-resident owner is someone who has a primary residence in another country. This could be a foreign buyer that’s never set foot in Canada, using the property strictly as an investment. It also includes Canadians that owned, and picked up to move elsewhere. Ruthless speculator buying homes to hold and keep empty for appreciation? Non-resident owner. Canadian that keeps their home while they work in the US for a few years? Also non-resident.

Unfortunately this is the first set of data, so we don’t have a time series to compare. What we can do however, is isolate these numbers to see how newer built units are being absorbed by non-residents. This isn’t a perfect method to determine growth, but it’s the best we have since we waited so long to collect this kind of information. We’re definitely looking forward to the next set of numbers, but in the meantime – here’s what we’re seeing.

Non-Resident Owned Homes Account For 4.77%… Kind of

The rate of homeownership by non-residents was high, but not as high as people expected. StatsCan found non-residents owned 36,541 homes, which is 4.77% of homes examined in Vancouver CMA. Breaking down the City of Vancouver, non-residents owned 14,310 homes, a rate of 7.61%. Richmond saw non-residents own 5,265 homes, a rate of 7.47%. These numbers are high, but are low compared to the current land registry numbers. That’s because new builds weren’t isolated.

Source: Statistics Canada.

Isolating properties built from 2016 to 2017, really highlights how foreign buying became out of control. Vancouver CMA saw 1,943 of the 16,188 homes go to non-residents during the period, a rate of 12%. The City of Vancouver more specifically saw 768 of the 4,451 homes go to non-residents, a rate of 17.25%. Richmond saw 425 of the 2,189 homes go to non-residents, a rate of 19.42%. Turns out Vancouver might be building a decent amount of supply, but up to 1 in 5 units gets bought by non-residents.

Source: Statistics Canada.

Non-Residents Own $45.252 Billion Worth of Vancouver Real Estate

The total dollar value of non-resident owned homes is also pretty mind blowing. StatsCan estimated non-residents held $45.252 billion of the $889.109 billion residential real estate market in Vancouver CMA. That works out to 5% of all dollar value across the region. Breaking that down, non-residents in the City of Vancouver owned $22.338 billion in homes, about 7% of the total value. Non-residents in Richmond owned $4.859 billion in homes, about 6.66% of the total market value. To contrast, non-residents owned $37.37 billion worth of Toronto real estate.

Source: Statistics Canada.

Now, no one’s really quite sure how much is an acceptable amount of foreign buyers. However, I seriously doubt almost 1 in 5 new builds is an acceptable number. Best case scenario, this means up to a fifth of the new housing supply is being consumed by those wealthy enough to own a second home. This is before we include any domestic speculators, that are adding another layer of pressure.

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