If you believe that house prices are being driven up in Vancouver because realtors are catering to wealthy offshore Chinese you are living in a fictional world. It is happening in our city’s housing market, but it’s statistically insignificant.
Vancouver Real Estate Board president Eugen Klein will tell you that off-shore buyers make up about three per cent of house sales. It has been at that level for years. The number comes from a monthly internal poll of his members and cross checks with land title transfer records.
If you really want to see a jump in home prices, Klein says, check out Maple Ridge. In the past year, single detached homes have gone up 30 per cent, more than anywhere else in the region. And it has zip to do with off-shore buyers. It is “real estate 101” says Klein: Infrastructure. Build it and they will come. It’s the Golden Ears Bridge, which has set that market on fire.
And if you doubt that infrastructure has an impact on property values, you should check out what’s happening along the Canada Line.
But back to those foreign buyers: This week the Globe and Mail ran a story about the rapid sale of condos in the new 428 unit Telus Gardens. Only four of the buyers were offshore. That information was collected as a result of the requirements from FINTRAC, the federal agency that monitors money laundering and criminal organizations.
Yes, yes, many of you have probably heard this story: Realtor picks up Chinese guy at the airport in the morning and spends the day touring him around choice properties on the West Side. As they head back to the airport, the realtor says: “We’ve looked at 20 properties and you haven’t said a word. Didn’t you like any of them?” As the Chinese guy steps out of the car he turns back to the realtor and says: “Buy them all.” Well, that story is an urban legend. Not true.
We do tend to conflate two things in our search for the truth: offshore buyers from China and Canadians of Chinese origin moving into the house next door. When I asked developer Michael Geller if he thought Chinese foreign investors were driving up the cost of residential housing in Vancouver, he first said there is not much statistical evidence so we are stuck with anecdotal information. But he also noted: “My friend just sold his Kerrisdale house for a few hundred thousand dollars more than he expected, but he doesn’t know if it was a local Chinese, or non-resident Chinese buyer.”
Ask former senior planner Larry Beasley about the view that Chinese foreign buyers are driving up the market and he’ll tell you it’s “bullshit.” He also points out that it is “racist.”
We have an unfortunate tendency to vilify someone or something when we have a problem and seek a simple solution. In this case, the problem is the extreme shortage of affordable housing. You can do as the city has decided to do, which is set up a task force to deal with affordable housing and involve as broad an assortment of experts as possible to deal with it.
Or you can set your hair on fire and blame Chinese foreigners. Then you can turn to the simple solutions that racists frequently come up with: quotas. I’m surprised we aren’t hearing proposals to reintroduce the head tax.
And who do you decide to hang this fictional phenomenon on? Who better than your local politician. Reaching for another stereotype, you blame politicians who won’t do anything about this because they are all corrupt. They need to line their political party’s pockets with money from big real estate developers who are making a fortune selling houses to all those Chinese foreigners.
If you buy into this proposition, you shut down serious debate about the need to increase supply through densification and changes to zoning regulations, to say nothing of what kind of city we all want to live in. Together.