CPABC Industry Update Summer 2015 - BC Real Estate Industry | Page 20

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Market Implications of Foreign Buyers
By Cameron Muir and Brendon Ogmundson

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ousing affordability has long been
a thorn in the side of the Metro
Vancouver story. Indeed, the
rapid acceleration in home prices that
occurred during the 2002-2008 period
still has many people gobsmacked.
Recent news stories have focused
on the foreign buyer segment of
the market, concluding that foreign
investors are unduly inflating home
values and driving potential domestic
buyers out of the housing market,
especially those looking to purchase
their first home.
However, data and analyses from a
number of sources suggest that foreign
investment is insufficient on its own to
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impact a market as large and diverse
as Metro Vancouver, save for a small
segment of luxury homes. In addition,
significant upward pressure on singledetached home values is largely driven
by land scarcity and densification
policies in the metro region. These
efforts have achieved relative stability
in the values of apartments and
townhouses that now comprise twothirds of the housing stock.
The British Columbia Real Estate
Association (BCREA) finds that while
no hard data exists on the number of
foreign buyers in the Metro Vancouver
housing market, the available data
and analysis on the housing stock and

I N D U S T R Y U P D AT E

flow of residential transactions in the
region suggest that foreign ownership
of housing is considerably less than
five per cent of the housing stock and
not more than five per cent of sales
activity.
The proportion of vacant dwellings,
as well as the proportion occupied by
foreign and/or temporary residents in
the Vancouver Census Metropolitan
Area (CMA) during the 2011 Census,
did not diverge significantly from other
large Canadian or provincial urban
centres.
Domestic investors are three to four
times more active in the region’s
housing market than foreign