Study says foreign buyers spend more on B.C. homes, but some dispute data

More on Vancouver housing and immigration:

Critics argue there are larger holes in the data than the small window of time it encompasses.

Richard Kurland, a Vancouver immigration lawyer who works with wealthy clients from China, said the government should break the statistics out into postal codes so foreign ownership of high-end homes could be better tracked, and ultimately taxed. Four per cent of Vancouver sales were registered to foreigners, but Mr. Kurland said those likely occurred in a select number of tony west side neighbourhoods.

“It would be useful, because this is a problem that should not be attacked by a mallet, but a surgeon’s scalpel,” he said. “The driver is at the high end of the property market.”

Richmond and Burnaby saw the highest levels of foreign ownership in the region, at 11 per cent and 14 per cent respectively, but there is no indication of where that investment occurred, he said.

Mr. Kurland said the government’s metric is not gauging the true level of foreign participation in the local housing market because it is classifying tens of thousands of wealthy “investor immigrants” from China as permanent residents despite earning all of their income abroad and, in some cases, continuing to live abroad while owning properties in B.C.

From 2002 to 2013, about 1,000 millionaire migrants flocked to Vancouver each year under a federal government program that was ultimately shut down after Mr. Kurland raised concerns over its effectiveness at generating local economic growth.

This net migration has made a large impact because when these families bought a home in B.C. another unit of housing was not relinquished into the market.

“With domestic people it’s [often] a push: one bought, one sold,” he said. “With an immigrant investor, it’s one bought, none sold, and that’s what restricts supply.”

Tom Davidoff, a professor at the University of British Columbia and economist leading the charge for a targeted property tax, said the government should not “drag nationality” into the housing debate, but rather focus on whether people owning homes in this frothy market also earn their money in the region.

If not, then those owners should be charged a surtax for enjoying government services paid for through income tax, he said.

“When you’re using something scarce you should pay the true cost,” he said.

Source: Study says foreign buyers spend more on B.C. homes, but some dispute data – The Globe and Mail