Monday, January 29, 2018

Non-residential ownership of apartments in double digits

Many people believe that foreign ownership of residential property is one of the causes of the current housing crises in our region. In 2016, the provincial government responded with a 15% additional property transfer tax for foreign nationals and foreign corporations that purchase property in Metro Vancouver. The impact of the tax can be seen on single-family housing, but it has appeared to have had a much more limited impact on the apartments and townhouses.

Statistics Canada recently release information on who owns what types of housing in Canada based on type of housing, and whether the owner is a resident of Canada.

The following table shows the percentage of housing owned by non-resident owners by housing type. I've included the regional, as well as City of Vancouver and Langley City figures.

Non-Resident Ownership by property type. Single-attached housing includes row houses and townhouses. Source: CANSIM Table 035-0005.

While there has been much focus around single-family housing unaffordability and foreign ownership, non-residential ownership of apartments is more significant, as has been their rapid appreciation over the last year.

Price Index for Lower Mainland - Three Year Trend. Source: Real Estate Board of Greater Vancouver.

It is not surprising that non-resident ownership is higher in the City of Vancouver than Langley City. There is no doubt in my mind that housing prices in the City of Vancouver are causing an upward pressure on housing prices in the rest of the region.

Housing exists along a continuum, with shelters and supportive housing on one end, and market-priced housing on the other end. If the rapid increase of pricing for all types of housing in our region continues, new residents of our region, and many in my generation, will not be able to purchase market housing in any form without significant changes in housing polices by the federal and provincial governments.

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