It looks like foreign buyers have all but disappeared from the Metro Vancouver real estate market – if you believe the latest data.
The latest property transfer data from the B.C. Ministry of Finance, compiled at the end of July, suggest that foreign buyers have pulled back dramatically from buying in Metro Vancouver.
According to the numbers released, just one per cent of all real estate transactions in Metro Vancouver and the Fraser Valley Regional District during the first six months of this year involved foreign nationals, down from three per cent in the same period a year ago.
Burnaby, however, still leads the pack.
According to an article in Business in Vancouver,“Burnaby, Coquitlam and Richmond were the top destinations for foreigners buying property in the first half of 2018, with three per cent of transactions in Burnaby and two per cent in each of the other two municipalities involving foreign nationals.”
The number of foreign buyers is an important issue for people in this province. “A recent Insights West poll found foreign homebuyers are the most commonly identified contributor to the region’s housing crisis, with 84 per cent of Metro Vancouver residents naming them – more than the proportion that identified population growth or that other bête noire, shadow flipping,” said the BIV article.
It’s why the BC Liberals imposed a tax on foreign buyers – although it left a loophole by not including pre-sale condos – and why the BC NDP increased the foreign buyer tax, added a speculation tax, and is tightening up the reporting rules when it comes to identifying who is buying.
It’s that last point that makes us skeptical about whether foreign buyers are really leaving the local housing market. There are questions about whether the data being collected truly shows who is buying a property – or whether foreign buyers are using loopholes. Are foreign buyers just using proxies to front for their purchases? We remain unconvinced that the official data is truly reflective of who is buying.
What’s obvious is home sales have slowed.
“Total residential sales in Metro Vancouver fell by 25 per cent in the first six months of this year compared with sales during the same period a year earlier,” said BIV.
In Burnaby, detached home sales have definitely slowed, with a total of 56 sold in June, down from 103 in June 2017. Over the same period, the median price of a home fell from $1.65 million to $1.45 million.
Overall, prices across the region have generally flattened but remain still sky-high. We’re hopeful that new reporting rules beginning in September will at least provide more accurate information on who is really buying.