Everyone was pretty excited when Statistics Canada and the Canada Mortgage and Housing Corporation (CMHC) released a batch of data suggesting that up to 20 per cent of newly built row houses and condos could be owned by foreign investors who do not live in Canada. But as Dan Fumano observes in the Vancouver Sun there may be more to the story, just as Price Tags Vancouver commenters have been noting in their own observations of what was looked at~and what was not~as part of defining who was buying what.
Calling this first data release ““the tip of the iceberg,” Haig McCarrell, director of the Statistics Canada division overseeing the Canadian Housing Statistics Program (CHSP) suggests that the next data release in the Spring of 2018 may contain further research clarifying some unanswered questions. Non-resident property ownership does not define what happens to that property, and also does not define other ways of registering the title to such property.
“For example, a property owned by a B.C.-incorporated shell company with foreign owners would, for the purposes of this month’s release, count as Canadian-owned, McCarrell said. Eventually, StatsCan wants to determine how much Canadian real estate is owned by “resident corporations with foreign owners.”Another area where McCarrell hopes to shed light is overseas residents buying Canadian properties in the name of spouses or children.
If a foreigner buys a Canadian home with money generated overseas, and puts the property in the name of a child attending school in Canada, it would not count as foreign-owned in this initial StatsCan study. McCarrell said future CHSP research could compare tax filings and property title records to find, for example, certain neighbourhoods with disproportionate numbers of multi-million properties owned by “students” with no declared income.
There’s no doubt that Vancouver’s market is unaffordable to people trying to work and live here. How this is happening and who is holding the property is important. Shell companies that are registered in Canada holding housing units would also be defined as Canadian owned, not foreign, and foreign ownership is defined as anyone whose principal residence is outside of Canada, regardless of country. McCarrell is also looking at the Victoria and Kelowna housing markets as well. The data will provide some benchmarking and will inform decisions on policy on how to create and manage housing for the folks that actually need to live here, and provide needed guidance on where to curb speculation on Vancouver housing as a commodity, not a necessity.
Source: Statistics Canada
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Reblogged this on Sandy James Planner.
Finally, some real data on foreign ownership and income will land in spring. Until it does, and until it is fully analyzed, calls to ban foreign ownership are grossly premature. Even the Duke of Data cannot define the precise level of influence foreign ownership alone has had on prices over the last 10 years. Is it 5%? Or 55%?
Meanwhile, the chronic shortage of developable land still exists, local speculation continues apace, the period of record low costs of credit extends into yet another New Year, the lack of housing diversity still does not meet demographic demand, the detached home on a large lot maintains its position as the Holy Grail, the rental vacancy rate dips below 1% again, and the focus on Vancouver’s market heats up while the Metro’s market chunters along.