For months, the debate raging in Vancouver around the widely held perception that investors from mainland China have been fuelling an obscene surge in house prices in the city has been stymied by the question: Where is the proof?
Endless stories about homes being bought by purchasers from China and left vacant were mostly anecdotal. The fact that real estate firms and their agents were increasingly catering to the Chinese market proved nothing, critics said. What this overheated conversation needed, most everyone agreed, was hard data that would move the discussion beyond supposition.
This week, a new study confirmed what people have long suspected: When it comes to the pricey west side of Vancouver, the majority of sales (66 per cent) of detached houses in a six-month period between August, 2014, and February, 2015, in three neighbourhoods were purchased by buyers from China. This report substantiated an earlier investigation by The Globe and Mail that showed much the same thing. I think we can now safely say we have moved beyond the apocryphal and arrived at a place rooted in substantive and reliable data.
This latest report prompted Vancouver Mayor Gregor Robertson to say he was concerned with the "racist tones" implied in the associated news stories. That suggestion is absurd, unless the mayor believes the media should have left out the fact that most of the new west-side purchasers in the city were from China. Maybe he also thinks stories should have omitted mentioning that what we are witnessing is part of a wider phenomenon: The Chinese are moving their money out of their country by the hundreds of billions. And some is landing here.
That is not anecdotal. That is not xenophobia or racism disguised as news. That is fact and, as we know, Vancouver is not the only city where rich Chinese are buying up property. It's happening in London, New York, Hong Kong and Australia. Vancouver is an elite global real estate destination and a safe haven for rich people's money. Get used to it.
And there is nothing wrong with pointing this out. Nor do I accept that it's wrong to focus solely on Chinese investors when we don't know how many there are from other parts of the world buying up the city. Well, if there was even a scintilla of evidence that multimillion-dollar residences on the west side of the city were being bought up in significant numbers by people from countries other than China, I'd say let's take a look.
This is not to say that we don't need more data to understand more precisely what we're dealing with here. Obviously, there is nothing wrong with someone purchasing a home in Vancouver and coming to live in it. If they're buying it simply to sit on as an investment and leave vacant, that's an issue that at least needs to be discussed. If city real estate is being used as a vehicle to launder dirty money, as has been suggested, that's a real problem. If these same purchasers are finding means to dodge Canadian taxes, as The Globe probe found, that's a big issue, too.
None of these issues have anything to do with race. Whether someone potentially circumventing the law is Chinese, Japanese or Polish is irrelevant. This is only an issue of race insofar as the majority of people buying real estate on the west side of Vancouver at the moment are from mainland China – and we'd be naive not to be alive to potential issues, legal and otherwise, that flow from this reality.
In the absence of more complete data, the kind only governments can obtain, the conversation around this subject will be filled with conjecture. But for anyone to blame the media for shining a light on this area is ridiculous. If anyone deserves criticism, it's governments, including Mr. Robertson's, which have been reluctant to delve into the data that might help clarify misconceptions, if they exist.
But these same governments have their own interests to protect. Our booming real estate industry is worth tens of millions to the province and the city. It's huge business to the banks, too, which are extending hundreds of millions of dollars in mortgages and lines of credit to offshore purchasers. The banks won't support any kind of crackdown.
My guess is the provincial government will, at some point, institute a form of luxury tax and that will be the extent of its efforts to "fix the problem," such as it is. And there will be talk about how these funds will go to help first-time home buyers. But in the end, nothing, and I mean nothing, will have changed. And you can take that to the bank.