House prices in Vancouver can appear to be so far out of reach that just who is buying real estate in Vancouver is a legitimate question. Well, if you throw money-laundering into the mix this is where the mystery becomes interesting.
The Canadian Housing Statistics forum seems to suggest that much of British Columbia’s housing stock is being bought up by foreign investors, specifically Chinese buyers (from Hong Kong) in Greater Vancouver and that co-ownership is more popular than ever. They also point towards “dirty money” purchases and extreme high earners.
Who is buying: an overview.
Vancouver has the biggest proportion of non-resident ownership (7.9%) with around 67% of these being condos with an average 30.4% higher value than those owned by residents.
Most of these condos (in the region of 80%) fall within the Vancouver CMA; in the City of Vancouver the average price of a non-resident owned condominium is just over 25% higher than a resident-owned equivalent at around $930k.
That said, on the matter of average price comparisons, detached homes showed the greatest variation with the average price of a non-resident’s property being $2.3m whereas resident-owned properties averaged out at $1.6m.
Hong Kong-based buyers
Both The Mail and The Globe have reported a surge in buyers from Hong Kong overtaking the traditional overseas buying location of China.
The one country, two systems framework may have something to do with this as those from Hong Kong look to shore up their positions as has BC’s 20% foreign buyers tax.
It is estimated that money laundering has accounted for 5% rise in prices in the Vancouver area and £5.3 billions’ worth of real estate business last year was with so called dirty money.
The Vancouver Sun has reported heavily on this subject and it is certainly a growing trend.