A third of Vancouver real estate buys are likely from China: report
Posted March 24, 2016 1:15 pm.
This article is more than 5 years old.
VANCOUVER (NEWS 1130) – The National Bank of Canada estimates one in three buyers of Vancouver real estate come from China. But an economist points out it’s a problem that we even have to guess, with governments at all levels dragging their feet on collecting data that’s often available in other jurisdictions.
This so-called “back-of-the-envelope” estimate looking at data from the US National Association of Realtors and a survey by the Financial Times does have value, says Tom Davidoff with UBC’s Sauder School of Business.
“It’s as good an approximation as you have when you don’t have perfect data,” says Davidoff. “I think to the extent that the property around this area is being bought from outside Canada. Now, if they’re coming to immigrate, that’s one thing. If they’re purchasing housing purely to store cash, that’s something entirely different.
“That’s why we have advocated at UBC policy both to tax pure investment behaviour, and also mechanisms whereby we can actually get good approximations of what’s going on.”
He says if he were Chinese and had money to invest, he’d definitely consider our market given the taxation levels here and other factors.
“It’s people following market incentives,” says Davidoff. “Look, if I was sitting in China with a lot of money, I’d be quite eager to put it somewhere safe where I wouldn’t have to deal with a lot of cash management, where taxes were low, and where I don’t risk confiscation by the Chinese government, which is a serious risk.
“So, Vancouver has a target on its back, because it satisfies all of those conditions. So that’s people responding to the market. That damages affordability for people who live and work here, but it provides investment opportunities for people overseas.”
As for pledges from the feds and the province to study data, he questions the value of that without any plans to actually act on the information gathered.
