Foreign buyers may have less of an impact on B.C.’s housing market than previously thought, according to a report from B.C. Notaries.
In November, the society surveyed 133 of its members on key real estate topics, including the perceived influx of foreign buyers. The report found that only five per cent of all residential real estate transactions managed by B.C. Notaries across the province were from foreign buyers.
The report’s release comes as the provincial government considers taking measures to combat the high cost of housing in B.C.
“Our survey results, which indicate that the vast majority of real estate purchases in B.C. are made by B.C. or Canadian residents, point to the need for careful consideration of any related legislative changes,” B.C. Notaries president Tammy Morin Nakashima said in a statement.
While the report shows foreign buyers making up seven per cent of residential sales in Greater Vancouver, Island-based notaries reported only two per cent of their transactions came from such buyers.
Additionally, while foreign buyers made up more than half of the clients for a few notaries in the Lower Mainland, the 20 notaries surveyed on the Island said foreign buyers made up no more than 10 per cent of their business.
“We haven’t seen a marked increase at all in foreign buyers,” Laurie Salvador, a notary with Salvador Davis and Company in Sidney. “We generally have maybe just a handful a year – maybe under six – and that hasn’t changed in many years.”
According to the report, the Island’s housing market has more in common with the Fraser Valley or the Okanagan, with lower foreign ownership compared to Vancouver. But despite the small numbers, 39 per cent of island notaries reported an increase in foreign buyers, not far off the 42 per cent bump seen by Greater Vancouver notaries.
Nonetheless, Salvador said the provincial average of five per cent shows that foreign sales are not making a significant dent in B.C. real estate markets.
“If it’s five per cent, that means 95 per cent of the people either live in British Columbia or somewhere else in Canada, and that says a lot about the health of our economy and the desire to live in British Columbia,” she said.
Salvador attributed the ongoing increase of house prices on the Island to such factors as a lull in development over the last five to seven years, creating an issue of supply and demand.
She noted the low ownership numbers should be studied by the provincial government as it determines if legislation is appropriate to address housing affordability.
“When we’re talking about government possibly imposing taxes for that, I’m sure they will discuss this with all the various players and make a wise decision if they feel that’s necessary,” she said.
“We certainly don’t want to discourage people that can afford to purchase in British Columbia. I think what people are afraid of is that those buyers are driving up prices, but I don’t think that’s the case at all.”
Q: WHO’S BUYING HOMES IN CANADA?
A report commissioned for the Canadian Association of Accredited Mortgage Professionals, A Profile of Home Buyers in Canada, was released this past June. It stated that of the roughly 620,000 households purchasing a residential property in an average year, approximately 45 per cent are first-time buyers, most between 25 and 34.
The next largest group, at about 33 per cent, is made up of buyers purchasing their third home or more – not surprisingly concentrated in the 45 to 64 age range – while roughly 20 per cent of households were buying for a second time.
The report said single-detached homes accounted for the largest share of the purchased, about 57 per cent. Semi-detached homes (duplexes) and row homes (townhomes) combined for about 19 per cent, the same amount as condominiums.
While incomes ranged widely among home buyers, it’s interesting to note that those earning $40,000 or less accounted for about six per cent of the sales. It’s a sign that people considered to be in the lower range of the middle class income brackets can still afford to buy.
GREATER VICTORIA MARKET UPDATE » MONTH TO DATE JAN. 18/16 COURTESY VICTORIA REAL ESTATE BOARD
» 225 / 351 — NET UNCONDITIONAL SALES / TOTAL, JANUARY 2015
» 468 / 1,027 — NEW LISTINGS / TOTAL, JANUARY 2015
» 2,399 / 3,283 — ACTIVE RESIDENTIAL LISTINGS / TOTAL, JANUARY 2015