Five percent of all real estate purchases made in Metro Vancouver were by foreign buyers and almost all of them were Chinese nationals, according to preliminary data collected on foreign investment in the real estate market.
Certain areas even showed a much higher level of investment by foreign nationals. The highest noted was Richmond with 14 percent of all buyers being foreign nationals. They spent around $61 million out of the $371 million worth of purchases made. In Burnaby too the percentage was high, 11 percent of all real estate purchases made were by foreigners.
These foreign buyers made up about 3 percent of the total real estate transactions made in the three week period when the government collected data. An average investment by a foreign national is around $1.157 million which is much higher than the average Canadian citizen’s investment of $735,000.
Chinese buyers have often been singled out as the main reason behind the soaring real estate prices in lower mainland.
The data comes in the wake of speculations being made that foreign dealings in the domestic real estate market was the real reason behind the spike in housing prices. In relation to the matter, Finance Minister Mike de Jong said the new figures represent the first real data behind the speculation.
“It’s real, it is actual and it is factual.” Mike de Jong told reporters before adding that the data is very preliminary and only contains information for 20 days.
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According to new regulations which came into force in June, buyers have to disclose whether they are Canadian citizens or permanent residents when they purchase a home. Those who are neither will have to disclose the country of their citizenship. This would help the government get a clearer picture of the investments made in the sector.
However critics feel that providing details of the buyer’s citizenship does not solve the issue and is not a good method of data collection.
“The issue isn’t one of citizenship,” NDP housing critic David Eby said. “There are a lot of people who have permanent residency who are not paying taxes in B.C., they are paying it somewhere else.”
The NDP wants a two per cent tax on assessed home values for those who don’t pay income tax in Canada.