A new housing report shows the rate of non-residents owning property is higher in British Columbia than in Ontario and the assessed value of those properties is worth more than those owned by residents. The figures, one industry watcher says, show B.C.’s foreign-buyers tax hasn’t entirely dampened international interest in the B.C. housing market.
The Statistics Canada report examines non-resident ownership based on whether the single owner or one of the owners of the property does not live in Canada. Newly-constructed condos in Vancouver especially attracted the foreign market: 19 per cent of condos built between 2016 and 2017 were owned or partially owned by non-residents. In Toronto, Canada’s other hot housing market, that number was 7.6 per cent.
In Vancouver, the median assessment value of a non-resident-owned condo was worth $96,000 more than those owned by residents. In Toronto, the gap was $37,000.
For detached houses in Vancouver, the value of the median assessment of a single-detached house was $236,000 more – 36.7 per cent higher – than the median-valued resident-owned property.
Real estate economist Tom Davidoff, of the University of British Columbia’s Sauder School of Business, said the numbers show that Vancouver remains popular for residents even after the foreign-buyers tax was implemented in 2016.
“Vancouver was a very attractive place for people who don’t necessarily make their living in Vancouver to buy real estate, and what that says to me is the empty homes tax and speculation tax are, in that way, a quite helpful policy,” he said in an interview.
The data doesn’t show the same kind of value gap between non-resident owned single-detached homes in Ontario and those owned by residents, but the gap widens when it comes to newer units, especially condominiums.
Mr. Davidoff said the data indicate non-resident buyers are concentrated at the top of the market.
However, he predicted the luxury home market has already been affected by all those taxes, including the foreign-buyers tax, empty homes tax and the speculation tax, and the impact will continue among out-of-town buyers.
Among all property types in both B.C. and Ontario, condominiums are the most popular for ownership among non-resident owners.
The report says properties that have at least one non-resident owner amount to 6.2 per cent in B.C., with 3.7 per cent owned by non-residents only. While in Ontario, 3.3 per cent of the properties are partially owned by non-resident and 2.1 per cent belong to non-resident only.
Both rates are higher in the Vancouver and Toronto areas. In the Vancouver area, nearly 5 per cent of the properties are solely possessed by non-residents, compared to 2.5 per cent in the Toronto area.
Josh Gordon, assistant professor at the Simon Fraser University School of Public Policy, said it’s good that this data is finally being gathered and released, but he said questions remain unanswered.
“There is the question of where the money is coming from for purchases or ownership, rather than simply ‘residency.’ Some of those deemed ‘resident’ may nevertheless be using foreign income or wealth, for example,” he said in an e-mail.