Vancouver’s mayor says a new study suggesting that the city’s red-hot housing market is fueled by Chinese buyers and offshore money is proof that “urgent” help is needed to address housing affordability.
Researchers analyzed 172 new home sales on the city’s West Side from August 2014 to February 2015, including posh neighbourhoods like West Point Grey and Dunbar, and found that 66 per cent were purchased by foreign buyers primarily from China.
The study identifies the properties as “some of the most expensive single family home properties in the City of Vancouver.”
Eighteen per cent of those properties sales have no mortgage – and were bought outright with cash. The figure equates to about $100-million in property sales over just six months.
After the study’s release, Vancouver Mayor Gregor Robertson wrote on Facebook that the province and federal government need to introduce tax measures immediately that would help the city divert money from wealthy owners and help bolster affordable housing.
A speculation tax would help slow down the practice of house-flipping, which is pricing middle-income families out of the market, Robertson said.
The mayor also wants to see a luxury housing tax charged to “the very wealthiest buyers or investors.”
Robertson is also calling for better tracking of international investment and absentee ownership at a provincial and federal level.
“There is nothing I hear more about from Vancouver residents than urgent challenge of housing affordability,” he said.
More than 25,000 people have signed a petition calling on British Columbia lawmakers to restrict foreign investment in Vancouver’s housing market.
But B.C. Premier Christy Clark has downplayed the role of offshore capital pushing up prices in the region, saying most buyers are local.
Clark has said purposefully lowering the value of homes would hurt current owners, who would be “robbed” of significant amounts of equity.
The housing study released Sunday night suggests that wealthy foreigners could be sheltering money from Canadian taxes by putting the property into a person’s name who has little to no income.
Nearly one-third of occupations of West Side home buyers in the survey were listed as housewife or homemaker, at 32 per cent, followed by business person, at 18 per cent, students and managers, at six per cent, and four per cent identified as self-employed.
The homes have an average value of around $3.06-million.
Because Canada doesn’t track foreign ownership, researchers used name analysis to get their data.
City planner Andy Yan said that nearly two-thirds of buyers had “non-anglicized” Mainland Chinese names.
“They could be coming from Mainland China, but they could also be from Hong Kong or from Taiwan,” Yan told CTV News.
“When they hit properties over $3 million we are talking about over 75 per cent that were bought by folks with non-Anglicized Chinese names.”
Authors say the case study is intended to be a snapshot and shouldn’t be interpreted as a representation of all ownership patterns in every Vancouver neighbourhood.
Mayor Robertson agrees, and cautioned people from jumping to conclusions about the ethnicity of Vancouver home buyers.
“What we don't need, however, is the blaming of any one group of people -- or any one kind of last name -- for the challenge of housing affordability,” he said.
“This is a public policy issue, not a race issue - and any confusion to the contrary only risks dividing our city and distracting Vancouver and our region from seeking the urgent action that is needed from the Provincial and Federal governments.”
