The latest property transfer data from the 小蓝视频 Ministry of Finance, released at the end of July, indicates that foreign buyers have all but disappeared from the Lower Mainland.
The numbers show that just one per cent of all real estate transactions in Metro Vancouver and the Fraser Valley Regional District during the first six months of this year involved foreign nationals, down from three聽per cent in the same period a year ago.
Burnaby, Coquitlam and Richmond were the top destinations for foreigners buying property in the first half of 2018, with three per cent of transactions in Burnaby and two聽per cent in each of the other two municipalities involving foreign nationals. The sole municipality to see an increase in the proportion of foreign nationals making purchases was the City of North Vancouver, where foreign buyers were involved in one聽per cent of deals in the first six months of 2018.
Those concerned about foreign nationals purchasing agricultural properties will be reassured to know that foreign buyers of Lower Mainland rural properties have fallen from 14聽per cent of the total in the first six months of 2017 to zilch in the first half of this year.
Nevertheless, a found foreign homebuyers are the most commonly identified contributor to the region鈥檚 housing crisis, with 84聽per cent of Metro Vancouver residents naming them 鈥� more than the proportion that identified population growth or that other b锚te noire, shadow flipping.
Bold moves
While foreign buyers are the favourite scapegoat for the housing crisis, lower foreign participation in local real estate markets this year has barely budged housing prices in the Real Estate Board of Greater Vancouver鈥檚 jurisdiction.
Sales statistics from the board through the end of June pegged the benchmark price for a residential property in Greater Vancouver at $1,093,600, or 10 per cent higher than a year earlier. The board鈥檚 through the end of July indicate a flattening in prices with the benchmark price now $6,100 lower than a month ago.
So, what鈥檚 a first-time buyer trying to scrape together a down payment to do?
It鈥檚 hard not to recall condo marketer Bob Rennie鈥檚 advice to Woodward鈥檚 buyers a dozen years ago: 鈥淏e bold or move to suburbia.鈥�
With sky-high housing prices this side of the Port Mann, many have chosen the latter option. According to 小蓝视频 Ministry of Finance data, Surrey registered 498 first-time home purchases in the first six months of 2018. Abbotsford was the second most popular choice, attracting 148 first-time homebuyers. Perhaps even more remarkable, sales in the far eastern reaches of the Fraser Valley accelerated, with Chilliwack attracting 121 first-time buyers. This positions it to overtake Richmond as the third most popular destination for first-time homebuyers. Richmond had 123 first-time buyers in the first half of 2018, but Chilliwack has outsold it in each of the past four months.
Looking ahead
Regardless of where prices land, there鈥檚 a clear yet consistent pullback in sales activity. Total residential sales in Metro Vancouver fell by 25 per cent in the first six months of this year compared with sales during the same period a year earlier. Real Estate Board of Greater Vancouver commentary attempted to put July鈥檚 decline into perspective by saying housing sales 鈥渞eached their lowest levels for that month since the year 2000.鈥� While this point of fact was sobering, R小蓝视频 Economics offered a more balanced perspective a couple of weeks earlier by saying that there was a greater balance between supply and demand in 小蓝视频 as policies within the province and at the Bank of Canada 鈥� read interest rates 鈥� were working to cool 鈥減ersistently strong markets.鈥�
Having forecast in March that house prices in the province would rise by six per cent this year, the 小蓝视频 Real Estate Association took a more cautious stance in its latest prognostication, simply anticipating 鈥渓ess upward pressure on home prices.鈥�
