The findings of a newly released Statistics Canada report this week may not be all too surprising, but they show a sizeable proportion of homebuyers in Metro Vancouver and British Columbia as a whole acquire properties for investment purposes.
Although the report is new, it generally focuses on the trends over the years leading up to the pandemic between 2017 and 2019, but these findings serve as the “baseline” for Statistics Canada’s future analysis of the more complex trends beginning in 2020 and beyond.
The proportion of homebuyers in Metro Vancouver who are real estate investors was 24.5%, including 17.1% as in-province investors, 4.9% as non-resident investors, 2.5% as business investors, and 0.8% as out-of-province investors.
The largest proportions of non-resident buyers within Metro Vancouver were in the cities of Vancouver and Richmond, which each had a rate of 7.8%, followed by West Vancouver at 6.2%.
The overall proportion of investors is also similarly at 25% for BC as a whole, with 15.7% as in-province investors, 2.4% for non-resident investors, 2.4% also for business investors, and 2.3% for out-of-province investors. Overall, there was a slight declining trend in the total proportion of investors from 2018 to 2020, which comes to a three-year average of 24.8%. The proportion further increases in tourism-based communities, such as in Whistler, where nearly seven-in-10 homebuyers were investors.
The urban areas of Metro Vancouver, Kelowna, and Greater Victoria each have similar total proportions of investor homebuyers, but the key difference in the type of investors is Metro Vancouver’s higher proportion of non-resident investors.
Statistics Canada
Statistics Canada
Statistics Canada
Over the three-year study period leading to 2019, immigrants were “overrepresented” among investor homebuyers relative to their share of the population, with immigrants making up 67% of in-province investor homebuyers in Metro Vancouver, despite representing about two-fifths of the population that year. There were similar proportions in 2018 and 2020.
Overall, investors accounted for a higher share of condominium apartment buyers than single-family detached house buyers and other home types. Metro Vancouver’s breakdown of its proportion of 32.1% of condominium homebuyers who are investors shows that 21.4% are in-province investors, 7% are non-resident investors, 2.4% are business investors, and 1.3% are out-of-province investors.
The overall proportion is similarly at 32.2% in Greater Victoria, but it is higher at 37.7% in Kelowna, which has higher sub-proportions of in-province and out-of-province investors.
Across BC, investor homebuyers accounted for 33.4% of condominium apartment buyers, but represent 18.9% of total homebuyers.
The study also found that the median price paid by non-resident investor homebuyers in Metro Vancouver for single-family detached houses in 2019 was about 20% higher than that paid by non-investor buyers, and the same pattern was seen by in-province investors who bought such properties that were on average about 10% more expensive. For condominium apartments, the median price paid by in-province investors was lower than those paid by non-resident investors, out-of-province investors, and business investors. However, there was no statistical difference in the price paid for such properties compared to the property’s latest assessed value.
In the years leading up to the pandemic, the Government of BC rolled out interventionist policies to curb foreign investment and speculation in real estate, and the federal government has also moved to temporarily ban home sales to non-Canadians in urban areas starting in 2023.
Both the provincial and Vancouver municipal governments have also rolled out policies curbing vacant properties and short-term rentals in an effort to pivot more of these homes into being occupied by people who live, work, and study in their communities.