By: Nathaniel Tok
The rising housing prices in the Greater Vancouver region continues to be a hot local topic early in 2018, and SFU researchers are weighing in with their own analysis of the data.
Andy Yan, director of the City Program at SFU, spent two weeks analyzing the 2018 assessment data to create maps illustrating areas in Greater Vancouver where single-family homes are worth $1 million or more. The maps graphically revealed that up to 73% of single-family homes in Greater Vancouver are now worth $1 million or more. This is a 50% increase since 2014.
Yan also found that up to 19% of the homes worth more than $1.5 million were owned by foreign buyers. He believes the housing situation could even be a province-wide issue as the maps could help prove that the housing issue is a problem bigger than Vancouver.
According to SFU’s assistant professor at the School of Public Policy Josh Gordon, this rise in prices can be attributed to foreign and non-resident ownership of houses: “Whether housing is owned primarily on the basis of foreign income or wealth.”
In an interview with The Peak, Gordon commented that “the substantial, continuous influx of foreign capital into Vancouver real estate has served to ‘decouple’ the housing market from the local labor market. This has greatly harmed housing affordability for those who work in the region.”
“We are now one of the worst housing markets in the developed world in terms of affordability.”
Gordon believes these foreign “marginal buyers” are raising the housing prices for everyone by “setting the pace,” outbidding local buyers and increasing prices on the housing market overall. This affects sellers’ behaviour and allows a relatively small number of buyers to have a big effect on the market.
The BC government has introduced a number of measures to help mitigate the housing situation such as the “foreign buyer tax” introduced in July 2016 and the Empty Homes Tax in Vancouver.
Gordon, however, believes that the government should be more aggressive in their measures. He stated, “. . .the previous BC Liberal government undermined the psychological impact of the foreign buyer tax by subsequently introducing demand stimulus measures, which sent a signal to the market that they wouldn’t let prices fall.”
Further measures the government should implement, according to Gordon, include a property surtax which could be offset by recent income tax paid, as well as a method to verify residency of property owners in the region. He suggests comparing income-tax data and home ownership so that policies such as “locals first” could be effective identifying who qualifies as a local.
Gordon also advocates for more complete data to be gathered on where the foreign money for buying homes in Vancouver is coming from.
With files from The Globe and Mail and Global News.
