Despite popular belief, foreign ownership does not play a major role in Vancouver’s ever-increasing housing prices as suggested by the latest CMHC report. Statistics Canada and CMHC (Canada Mortgage and Housing Corporation) teamed up to analyze property ownership as well as financing characteristics of the residential real estate in Canada. In a comprehensive study leading up to the report published In December 2017, they gathered data on ownership through tax data, Census, land titles, property assessment including both individuals and corporations, where they used a very broad definition of “non-resident” to include even Canadians Citizens who are outside of Canada. The results provide that even with that broad definition, non-resident ownership of condo’s in Vancouver was measured at a marginal 2.2% of the overall market and displayed a very similar or lower pattern across other cities in Canada. Interestingly, data also suggests that despite the Liberal Government’s Foreign Buyer Tax (FBT) the non-resident ownership shares of the stock of condos has shown no statistically significant change in 2016.
While the regulators must put policies in place to ensure the stability of our housing market, adopt strict measures on tax avoidance and money laundering of foreign capital through Canadian Real Estate, it is important not to lose sight of real and primary causes of unaffordability in Vancouver. At the center of the housing crisis is the red tape and bureaucracy at the municipalities resulting in unnecessarily lengthy and onerous development permit process, sub-optimal zoning through reduced density allowance and land reserves held by various levels of government, which contribute mainly to cost of development and a shortage of supply eventually causing higher prices for end-users.CMHC Report