A new study supports the notion that overseas investors are squeezing locals out of Vancouver’s red-hot housing market.
The study, conducted by Andy Yan of Bing Thom Architects, found that on paper, more students than doctors are buying real estate on Vancouver’s pricey west side.
“Perhaps these students have access to a certain amount of capital,” Yan said.
That capital may be coming from overseas, according to Yan’s study of 176 home sales over a six-month period. Two-thirds of those houses are believed to have been bought up by Mainland Chinese.
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“It really reinforces for me the phenomenon of what’s called the ‘astronaut family,’ which is dad’s in China, mom and the kids are in Vancouver,” said David Eby, MLA for Vancouver-Point Grey. “They’re going to school in Vancouver and dad’s supporting the family.”
Critics question how low earners can afford some of the city’s most expensive real estate.
“It’s surprising to me to see so many students and homemakers driving this market,” Eby said.
Yan’s methods are not an exact science. He conducted a title search of the homes, looking for non-anglicized Chinese names in combination with job descriptions like homemaker, student and businessperson as indicators for foreign investment.
“Relying on people’s names as an indication of certain things can be a bit unreliable,” B.C. finance minister Mike de Jong said.
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Yan said some of his findings need to be addressed, including how banks are signing off mortgages to buyers in the lowest tax bracket.
“Eighty-two per cent of our study population was financed,” Yan said.
That may explain why Royal Bank of Canada dropped its lending cap for borrowers with no local credit history. When asked, RBC was unavailable for comment.
“If this is what’s driving our real estate market, we’re incredibly vulnerable to a shift in economic realities in China,” Eby said. “If that part of the market dries up, where’s the resiliency in the rest of the market?”
The province admits there needs to be more study, but stops there.
“They come here, they like what they see and they want to stay here,” de Jong said. “That’s all good news.”
-With files from John Hua
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