Foreign sales peak in Richmond as Quebec ramps up investor immigrant program
July 12, 2016
By Craeme Wood, Richmond News |
According to a small window of data collected by the provincial government on residential real estate purchases in B.C., only 3.3 per cent was sourced from foreign nationals.
However, those figures were higher in Metro Vancouver, with one city standing out in particular — Richmond.
Numbers crunched by the B.C. government during a 19-day period in June of this year, revealed that one in seven property transfers, or 14.3 per cent, on Lulu Island involved a foreign national (defined by the government as someone who is not a permanent resident or a Canadian citizen).
The data was released Thursday afternoon by Finance Minister Mike de Jong, and was quickly criticized and questioned by local academics and the opposition NDP.
“Today, they’re content to ignore warnings from our national banks, from FINTRAC, and from academics, because they’ve collected 19 days of self-reporting data on citizenship status. It’s incredible,” said NDP housing spokesperson David Eby.
The data was collected after the provincial government began asking home buyers if they are a Canadian citizen or a permanent resident. DeJong stated 90 per cent of all foreign purchasers were from China.
Tom Davidoff, director of the UBC Centre for Urban Economics and Real Estate, called the data “imperfect” and told the Richmond News that it’s important to understand the source of all capital flowing into the hot real estate market.
For instance, offshore money can be funneled by foreigners to relatives and businesses, or permanent residents and citizens may be bringing in money on their own.
Either way, noted Davidoff, the data on foreign nationals doesn’t paint the entire picture of why Metro Vancouver’s housing market is unaffordable to local buyers, as housing prices far outstrip upper middle-class, local incomes.
“I don’t think we learned the extent outside money is driving the market,” said Davidoff, adding it’s important to keep in mind that, overall, other factors such as low interest rates, a weak Canadian dollar and home equity loans are part of a growing red flag.
Furthermore, the short window of data may not be entirely accurate, granted June showed a relative slowdown in the market, noted Davidoff, who said a more telling set of data would have been income data on home purchases. “The data I would (want) wouldn’t have China in it,” he said. “I think it was kind of weird to focus on nationality.”
Nevertheless, Richmond’s real estate market was the most influenced in B.C. by foreigners.
From June 10-19, records showed there were 392 residential property transfer transactions in Richmond.