Last Updated on January 16, 2011 by Steven Meurrens
The topic of the relationship between wealthy, primarily Chinese, immigrants and their effect on Vancouver’s housing market has recently become a bit of a hot topic in the city. I was recently quoted in Vancouver Magazine on the topic, and specifically on the relationship between the Canada and Quebec immigrant investor programs and immigration to Vancouver.
The answers to such questions lie largely in the numbers, though not necessarily the obvious ones. Anyone in real estate will tell you the wealthy arrivals dominating the market are mostly from mainland China, yet immigration from there has been dropping in recent years. In 2009, just under 9,000 mainland Chinese arrived in Vancouver, down from almost 13,000 in 2005. But, says Steven Meurrens, an immigration lawyer with Larlee Rosenberg, official numbers don’t necessarily reflect reality. About half the Chinese immigrants arriving in Vancouver are in the investor class and thus must prove a net worth of at least $1.6 million (doubled since new rules were instituted in late 2010).
That number might mean only 1,200 or 1,500 households-not terribly significant in a region where sales exceeded 40,000 in 2010-but Meurrens says the number of investor immigrants from mainland China landing in B.C. is actually considerably higher than what those reports suggest. In the 12 months ending September 30, Quebec (which has its own immigration system) turned away virtually no one, issuing almost 6,000 investor-class visas of its own. There are no restrictions on where visa recipients settle, and a significant number choose Vancouver over Montreal. “The money goes to Quebec,” says Meurrens, but “our office regularly advises people who immigrated under the Quebec Investor program and have a wife and child living in B.C.”
Indeed, according to a report in the National Post on May 17, 2011, Chinese buyers have caused Vancouver’s average housing prices to eclipse London and New York.
In 2010, Vancouver had the third-highest housing costs among English-speaking cities worldwide, according to Canada’s Frontier Centre for Public Policy. Only Hong Kong and Sydney, another magnet of Asian immigration, were more expensive. Vancouver’s median home price of $602,000 was 9.5 times the annual median household income of $63,100, the group said in a study released Jan. 24. Canada had a 4.6 national multiple, making it “seriously unaffordable,” while the U.S. at 3.3 was “moderately unaffordable,” the study showed. To be affordable, the multiple must be 3 or less.
Vancouver was more expensive than San Francisco, London and New York by that measure, the Winnipeg-based centre said.