[This speculative piece was clearly off base. Three months after it was published, the Government of B.C. introduced a 15 per cent tax on foreign real estate investment within Metro Vancouver in an effort to cool the housing market.]
The current monthly report on Greater Vancouver real estate shows the benchmark price for detached homes in the west of the City of Vancouver crossing the $3,000,000 threshold. This is in an urban region where Statistics Canada reported the median household income as $73,390 in 2013.
Until recently, governments downplayed the significance of runaway home prices. The problem appeared to be mostly confined to detached homes in a few upscale enclaves. This has changed, with detached homes in a growing number of neighbourhoods crossing the $1,000,000 mark — in Burnaby East, for example, an area that mixes modest and middling properties. Apartment prices are rising sharply in Vancouver and Burnaby after years of slow or no increase.
Analysts and news media have identified the main driver as safe-haven investment from foreign sources, especially China — drawn by a liveable Chinese-speaking city, a cheap Canadian dollar, low interest rates and an open real estate market. The British Columbia government has not confirmed this proposition, but it has started to gather data on the citizenship of property buyers, for what that’s worth. The provincial opposition leader has recently suggested that money-laundering is part of the foreign investment equation. Continue reading