Foreign home buyers nearly vanish from Vancouver
April 9, 2021
Photo: | Home BUILDER
While Metro Vancouver’s housing market has been on a blistering pace during the COVID-19 pandemic – with sales up 126 per cent year-over-year as of March 2021 – foreign buyers have nearly vanished.
In 2019, up to 30 home sales per month were to foreign nationals, according to provincial and municipal data, which convinced the B.C. government to raise its foreign-homebuyer tax to 20 per cent.
Since March 2020, that monthly number of transactions has never surpassed 15 – and failed to break single digits for six of 2020’s last 10 months, when monthly sales averaged more than 2,000 homes a month.
“In March 2020, we had 24 foreign-involved transactions in the city of Vancouver. The next month, we went down to six,” said Andy Yan, director of the City Program at Simon Fraser University and one of the city’s leading urban-planning researchers.
Brian Higgins, founder of YVR4Sale, which has clients from the U.S., Europe and Asia said foreign-buyer activity in Vancouver has lagged behind as far back as 2016, when former premier Christy Clark first introduced the foreign buyers tax.
Property transfer data from the B.C. Ministry of Finance, showed that, as of mid-2018, foreign homebuyers in Metro Vancouver had fallen to just 1 per cent of transactions, down from 3 per cent a year earlier.
Higgins added that Vancouver’s empty home tax and the additional speculation tax implemented under the current BC NDP government also “scared a lot of people onto the sidelines
Many Vancouver real estate agents expect foreign buyers to increase, however, spurred both my Vancouver’s red-hot housing market and turmoil in Hong Kong, which was the source of the last big immigration surge in the mid-1980s.
According to March a 28 report by Reuters, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) tracked $43.6 billion in electronic fund transfers from Hong Kong to Canada during 2020.
The actual amount of money being transferred out of Hong Kong into Canada may even be larger, since FINTRAC data captures only a fraction of total legal inflows into the Canadian economy. Many transactions are not included, such as transfers via cryptocurrencies, between financial institutions, or under $10,000, explained FINTRAC spokesperson Darren Gibb.