Overseas property buyers flocking to Vancouver

New data shows that overseas buyers accounted for 10 per cent of property sales in Vancouver in a 30-day period.

The British Columbia government figures show that foreign buyers spent more than CDN$885 million on Metro Vancouver real estate between 10th June and 14th July. The cities of Burnaby and Richmond, both located within Metro Vancouver, had the highest number of foreign buyers at 18 per cent.

By way of comparison, the housing market of the province’s capital, Victoria, had 3.5 per cent of its real estate transactions attributed to foreign buyers during the same period.

There was no data released regarding the buyers’ country of origin.

The high number of overseas buyers have long been deemed responsible by many experts for driving up Vancouver property prices. The latest Canadian Real Estate Association data shows that property prices in Vancouver grew by 11.3 per cent in the year to June 2016. The average price of a property in the city currently stands at more than CDN$1 million.

Yesterday, BC’s Finance Minister Mike de Jong stated his belief than demand from overseas nationals is contributing to rising house prices. He also said the government is taking steps to reduce the demand and increase the domestic supply.

One of these steps is a new 15 per cent property tax on purchases made by overseas buyers in metro Vancouver.

The change is scheduled to take effect on 2nd August. The provincial government has said that it will consider increasing the tax to 20 per cent or decreasing it to 10 per cent as it sees fit.

While de Jong acknowledged that the one-week turnaround is quick, he stressed that purchases already agreed and waiting to go through are exempt from the tax. The tax will be uniformly applied to any property registered on and after 2nd August.

Article published 27th July 2016