{"id":17680,"date":"2021-04-13T15:15:00","date_gmt":"2021-04-13T22:15:00","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=17680"},"modified":"2021-04-12T14:50:21","modified_gmt":"2021-04-12T21:50:21","slug":"foreign-buying-activity-slows-dramatically-but-will-that-slowdown-continue","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2021\/04\/foreign-buying-activity-slows-dramatically-but-will-that-slowdown-continue\/","title":{"rendered":"Foreign Buying Activity Slows Dramatically, But will That Slowdown Continue?"},"content":{"rendered":"<p style=\"text-align: justify;\">The numbers and the anecdotal evidence are clear : while Metro Vancouver\u2019s housing market has been on a surprising tear during the COVID-19 pandemic, the market for foreign buyers looking to enter the Lower Mainland has not followed suit.<\/p>\n<p style=\"text-align: justify;\">But while local real estate industry representatives and urban development analysts agree that COVID travel restrictions have limited international interest in Vancouver-area homes, they disagree on whether the foreign-buyers market faces a longer-term correction.<\/p>\n<p style=\"text-align: justify;\">According to municipal residential real estate data, there were five months out of 12 in 2019 in which there were more than 30 foreign-involved transactions that triggered the 20% provincial foreign-buyers tax in Vancouver.<\/p>\n<p style=\"text-align: justify;\">Since March 2020, that monthly number of transactions has not surpassed 15 \u2013 and failed to break single digits for six of 2020\u2019s last 10 months.<\/p>\n<p style=\"text-align: justify;\">\u201cWho really wants to move globally in the middle of a pandemic?\u201d said Andy Yan, director of the City Program at Simon Fraser University and one of the city\u2019s leading urban-planning researchers. \u201cIn March 2020, we had 24 foreign-involved transactions in the city of Vancouver. The next month, we went down to six.\u201d<\/p>\n<p style=\"text-align: justify;\">Mike Stewart, who works with corporate rentals for out-of-town executives, said the pandemic \u201chas really put the crimp on corporate rentals, because people are not travelling.\u201d<\/p>\n<p style=\"text-align: justify;\">Brian Higgins, founder of YVR4Sale, which has clients from the U.S., Europe and Asia, agreed that the real estate market boom is driven locally. But Higgins said foreign-buyer activity in Vancouver has lagged behind as far back as 2016, when former premier Christy Clark introduced the 20% foreign buyers tax on any such purchases.<\/p>\n<p style=\"text-align: justify;\">Higgins added that Vancouver\u2019s empty home tax and the additional speculation tax implemented under the John Horgan BC NDP government also \u201cscared a lot of people onto the sidelines.\u201d<\/p>\n<p style=\"text-align: justify;\">Yan, however, noted that even as the number of transactions fluctuated in the market since 2016, their overall value has stayed relatively stable in the $20 million-to-$60 million range every month. That indicates that the taxes have not dramatically shrunk the total dollar value of transactions \u2013 just the number of buyers who can afford the extra 20%.<\/p>\n<p style=\"text-align: justify;\">\u201cYou have to remember, the nature of the foreign buyers tax wasn\u2019t to prevent more buying,\u201d Yan said. \u201cIt was just to capture value for the B.C. taxpayer. It\u2019s essentially increasing the fee for [international buyers] to access the clubhouse. And you\u2019ve also got to remember: It\u2019s very specific to where and what. It\u2019s a very particular type of property in specific regions that are moving up.\u201d<\/p>\n<p style=\"text-align: justify;\">He added that the B-20 mortgage rules introduced in 2018 that have been credited with spurring the current real estate boom have instead discouraged foreign buying, because the requirement for non-Canadians to get a mortgage makes the process more difficult.<\/p>\n<p style=\"text-align: justify;\">What is also clear, observers say, is that international demand has not gone anywhere. Both Stewart and Higgins said they anticipate a surge in buying from abroad \u2013 mostly from Canadians living outside Canada in places like the United States, Hong Kong, Great Britain or Europe \u2013 as soon as vaccinations become widespread and travel restrictions are loosened.<\/p>\n<p style=\"text-align: justify;\">Higgins said Ottawa\u2019s plan to bring in as many as 400,000 immigrants annually in the next few years to boost the Canadian economy means the Metro Vancouver market will likely see another wave of cross-border buyers soon after the pandemic ends.<\/p>\n<p style=\"text-align: justify;\">\u201cIf you are coming out of an unstable situation, people are willing to put a little more money into a more stable country. And Canada is a stable country \u2026 and Amazon [Nasdaq:AMZN] is coming in 2024. The tech coming out of that will be an immense economic boom for the city.\u201d<\/p>\n<p style=\"text-align: justify;\">But Yan urged caution. He noted that while the demand has not gone away abroad, how strong and consistent that foreign demand will be is hard to determine.<\/p>\n<p style=\"text-align: justify;\">\u201cOf course, the rest of the world has changed. Let\u2019s face it, one of the main sources of growth had been coming in from China, and the Chinese rules \u2013 from the people I\u2019ve talked to \u2013 have certainly tightened up. That brings a complication that we may not see the [previous high levels of] demand come back in.<\/p>\n<p style=\"text-align: justify;\">\u201cWe don\u2019t know what happens globally.\u2026 And a lot of things that drive foreign buyers happen outside of Canada. The world in 2021 is vastly different than what it was in 2016.\u201d \u2022<\/p>\n<p style=\"text-align: justify;\"><a href=\"https:\/\/biv.com\/article\/2021\/04\/pandemic-cools-property-purchases-foreign-buyers\" target=\"_blank\" rel=\"noopener\">Pandemic Cools Property Purchases by Foreign Buyers<\/a> by Chuck Chiang | BIV<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The numbers and the anecdotal evidence are clear : while Metro Vancouver\u2019s housing market has been on a surprising tear during the COVID-19 pandemic, the market for foreign buyers looking &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2021\/04\/foreign-buying-activity-slows-dramatically-but-will-that-slowdown-continue\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-17680","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Foreign Buying Activity Slows Dramatically, But will That Slowdown Continue? 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