Victoria: Updated data on foreign investment show more than $885 million in foreign investment flowed into Metro Vancouver’s residential real estate market in just five weeks, representing 86% of the capital invested in the sector by foreign purchasers throughout the province.
Beginning Aug. 2, 2016, an additional property transfer tax rate of 15% will apply in Metro Vancouver to purchasers of residential real estate who are foreign nationals or foreign-controlled corporations.
As part of Budget 2016 government began collecting data to identify foreign purchasers, and better understand whether and to what extent foreign capital is having an effect on residential real estate prices.
Data collection began June 10, 2016. From June 10 through to July 14, data for all of B.C. show:
- 19,383 residential property transactions in British Columbia
- 1,276 transactions involved foreign nationals
- This shows a rate of 6.6% of transactions involved foreign nationals
- The total investment by foreign nationals was $1,024,031,118 representing 7.9% of the total investment
Data specific to Metro Vancouver show:
- Metro Vancouver accounted for 49.7% of the real estate transactions in B.C., and 73.3% of transactions by foreign buyers
- By value, Metro Vancouver accounted for a total $8.8 billion worth of transactions; foreign purchasers accounted for $885,393,373.
- The average investment by Canadian citizen or permanent resident buyers in Metro Vancouver was $911,425, while the average investment by foreign buyers was $946,945.
Updated data specific to the City of Vancouver, Burnaby, Richmond, Surrey and the capital region are shown in the attached tables.
While foreign investment in residential real estate markets is only one factor driving price increases in Metro Vancouver, it represents an additional source of pressure on a housing market struggling to build enough new homes to meet demand. The Province’s additional tax on foreign purchases will help manage foreign demand while new homes are built to meet local needs.
Property transfer data also show that the measures announced in Budget 2016 continue to benefit families buying newly built homes. Budget 2016 introduced the Newly Built Home Exemption to the Property Transfer Tax, which can save purchasers up to $13,000 in property transfer tax when purchasing a newly constructed or subdivided home worth up to $750,000.
Data to July 14, 2016, show:
- 4,027 families have saved an average of $7,698 on their newly built homes.
- Total savings to families: $31,770,029
- 191 per week on average (21 weeks)
- 27 per day on average.
The existing First Time Buyers Program has also helped more than 11,000 families buy their first home this year.