Majority of foreign buyers from China, new real estate data reveals
Published Thursday, July 7, 2016 11:08AM PDT
Last Updated Thursday, July 7, 2016 6:37PM PDT
A total of 3.3 per cent of B.C. real estate transactions made over a 19 day period in June were made by foreign buyers, according to new data released by the government showing the impact of offshore buyers in the province's overheated real estate market.
The information comes three weeks after a new requirement took effect on the property transfer tax form that compels buyers to disclose whether they are a permanent resident or citizen of Canada. If not, they are compelled to fill in the country of citizenship.
This is the first time ever the province has tracked the country of origin for buyers.
Finance Minister Mike de Jong said there were 10,148 home sales during the first 19 days of data collection between June 10 and 29. That represents about 10 per cent of what is expected for total sales in the province this year.
According to the data, 337 sales were made by foreign nationals – equating to roughly 3.3. per cent. Of those, 258 buyers – or 76.6 per cent – originated in China.
The other countries of origin include the U.S., with 23 purchases, U.K. (10), Australia (nine), Korea and Taiwan (five each), India and Switzerland (four each), Germany (three), Romania (two) and one each from Austria, Brazil, Chad, El Salvador, Indonesia, Ireland, Italy, Japan, Malaysia, Mexico, New Zealand, Nigeria, Tanzania and the U.A.E.
"The largest group for the period we studied is from China. We have to be careful about the conclusions we draw from that," de Jong said, adding that the buyers list "is like a veritable United Nations."
The impact of foreign ownership was more pronounced in the Lower Mainland, where a full 50 per cent of the real estate transactions were made. Of those, 4.57 per cent – or 234 purchases – were made by Chinese nationals.
The average investment of a Canadian citizen or permanent resident was $735,000, much less than the $1,157,000 for foreign buyers.
"It appears foreign nationals are purchasing at higher values than the average Canadian citizen," he said.
The finance minister says that foreign ownership is "certainly a presence" when it comes to price increases in the provincial real estate market.
There is a genuine and legitimate interest from locals in the role foreign nationals play in the market, he added.
De Jong says the BC Liberals are "concerned" about the affordability and supply issues that local buyers and renters face.
The bureaucrat cautioned against drawing strong conclusions from the data, saying it is for a "very limited period."
"[It] is a very healthy sample size but chronologically it is not even a month," he said.
"We believe it is very accurate for that point in time and the closest thing we have about the participation of foreign nationals in the B.C. real estate market."
De Jong said he plans on releasing the information about foreign buyers monthly, given the interest in the subject.
Here are the main findings released from the B.C. government:
- 10,148 residential real estate transactions in B.C., totalling more than $7.6 billion.
- 337 transactions (3.3%) involved foreign nationals, worth $390 million (5.1%).
- In Metro Vancouver, there were 5,118 transactions worth nearly $5.4 billion, of which 260 involved foreign nationals (5.1%), worth $351 million (6.5%)
- In the City of Vancouver, there were 1,139 transactions, totalling more than $1.6 billion. 47 of these involved foreign nationals (4.1%), worth $64 million (3.9%).
More to come...
Mike de Jong reiterates this is a small dataset for a short period of time. Now taking us through #s for Vancouver and Surrey— CTV Bhinder Sajan (@BhinderSajan) July 7, 2016