The CEO of the Canadian Mortgage and Housing Corporation (CMHC) says Vancouverites shouldn’t be blaming foreign buyers for the rise in home prices, or the recent decline.
Speaking to the Vancouver Board of Trade on Wednesday, Evan Siddall said the Vancouver real estate market of recent years has created a divide in the city’s population.
“Rising housing prices have begun to create unhealthy tensions that are seemingly pitting Vancouverites against one another: established homeowners against younger families trying to get a foothold in the market and existing residents against newer arrivals,” Siddall said.
The tension toward foreign buyers, most notably displayed through the implementation of a 15 per cent foreign buyers tax in July, is not founded in fact, according to Siddall.
The former Goldman Sachs managing director cited domestic residential investing, population and economic growth, Canada’s tax laws, and supply issues as factors driving Metro Vancouver’s overheated housing market, along with foreign investment.
“While foreign investment clearly is a factor, it is not the only one.”
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Siddall also took aim at the media for their coverage of the Vancouver real estate market, but didn’t claim it was “racist.”
“When a white person buys a house, we don’t notice. When somebody of a different colour does, we do. That’s not good economics,” he said. “It’s a more captivating story than it is that somebody who has the same complexion as me bought a house for $30 million. Why is that not just as newsworthy?”
Responding to those who called the recent fall in home prices and sales activity since the foreign buyers tax proof of overseas influence, Siddall said the cooldown was beginning before the tax was announced. He also added similar taxes in Sydney and Hong Kong have been ineffective.
On July 29, the last business day before the B.C. foreign buyers tax was implemented, more than $850 million in residential property transactions involving foreign nationals in Metro Vancouver were registered. That was equal to more than 55 per cent of all transactions registered in Metro Vancouver on that day.
In contrast, the period of Aug. 2 to 31 saw 60 transactions in Metro Vancouver that involved foreign nationals. The total value of the properties transferred was $46.9 million, which, the government said, was less than one per cent of total Metro Vancouver transactions during that period.
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The Real Estate Board of Greater Vancouver’s November statistics report showed a continued drop in sales across the region, particularly in the detached housing market.
Siddall stressed that anxieties around the housing market shouldn’t be taken out on foreigners.
“It is vitally important that housing be a source of strength for our communities and for our economy,” he said. “We cannot allow it to become a wedge that divides us, separating neighbours and communities, and creates tensions between newcomers and those that have been here longer.”
–With files from The Canadian Press
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