China's Banks Cooling Vancouver Housing Investment?

A lot of hyperventilation over the evils of foreign real estate investment has occurred over the last couple of years, most of it by well-known pundits. But so far the evidence does not back up their central conjecture that foreign money was the only cause of the affordability crisis. Today the foreign buyer’s tax is said to have resulted in nearly a 50% drop in sales, but prices dropped by only 4% so far? C’mon. That’s not evidence.
In the last decade we have seen the second deepest financial crisis in a century and a real estate tax targeting wealthy foreign buyers, and neither has resulted in anything but minor dips in land (housing) prices. Isn’t it obvious by now that other forces have been at play all along, and that land value accompanied by record cheap credit in a place where there is very little undeveloped land left will not go down so easily?
During this overly heated narrative not a lot of rational consideration was given by the media to the simple geometry of land use / zoning and its relationship to supply. The fact remains that ~30% of housing occupies ~80% of residential land in this town, and I’d guess the Metro is similar. In its place we received cavalier dismissals of topics with such boring headlines and low value click bait while inflammatory commentary filled the media (both mainstream and social) about foreign invasions of money, Lambos, unemployed billionaire child homeowners, and the supposed by-product of all this: Empty homes.
When you look at the map linked below it’s obvious there are empty homes in every neighbourhood, some of course more than others. But “empty homes” is a misnomer on its own, as the authors also throw in “underutilized” as a caveat and admit that census tracking isn’t perfect. Being away on a long vacation or dealing with the legal distribution of an inheritance through an estate account (often taking 12-18 months or longer) at the time of the census could count you on this list. The relationship of empty homes to foreign wealth is not well defined, but the assumption is that it tracks areas with higher value real estate, which are in turn attractive to wealthy foreign investors. It does track more closely with areas where speculation is higher, such as where hot condo sales occur, like Metrotown and Marine Gateway, which are priced lower but have a similar rating as Coal Harbour with much higher values.
https://betterdwelling.com/city/vancouver/heres-metro-vancouvers-66719-unoccupied-homes-interactive/
When we look a bit closer, Bowen Island (22% vacant – not a big surprise), the Seymour watershed (20%), and the flats around Colony farm (100% — puzzling, but it’s there) have the highest vacancy rates. The empty home ratios of Whalley, Burnaby Flats farmland, parts of North Delta, Surrey Centre, Gilford, South Surrey and Whiterock are in the same 10%-15% rate as the top dozen neighbourhoods in Point Grey, West Kits, Dunbar, South Vancouver and Shaughnessy, yet the latter get all the press only because they are pricier. Moreover, couching that 10% of a Point Grey neighbourhood is vacant by a best-guest definition isn’t fair to 90% of people who live there all the time. That’s 90% participation in the local economy – why isn’t that used for comparison? By extension, they would probably find even higher empty rates in Calgary due to the downturn of their one horse economy.
This exercise only proves that the number of so-called empty homes is not the only (or even a true) measure of the overall health of a community.
There is also the simple geometry of increasing the supply of housing by subdividing expensive residential parcels of land into more affordable (and less wasteful) smaller pieces. One $4 million Point Grey corner lot a half-block from the transit and commercial amenities of 10th Ave could become eight rowhouses with suites, thus lowering the per home price tag while also increasing income. Or 20 apartments in a low-rise building of varying sizes for various incomes.
It’s not nuclear physics.