Daniel Hiebert’s Study says Immigrants have major impact on Canada’s housing prices.
Daniel Hiebert a UBC geographer conducted a study, which says there is a direct correlation between rising house prices and immigrants. Especially in the metropolitan cities like Toronto and Vancouver.
It is a known fact that Chinese and Asians in general, when they come to Canada they come with money. Especially those who come on investor or entrepreneur visa. Daniel Hiebert report indicates the same, Chinese and South Asians become homeowners at a much higher rate than other immigrants and the general population.
The influx of Chinese money has been moving the Luxury home market of Vancouver higher and higher. British Columbia real estate in February 2016, broke all records, highest of which was set 24 years ago in 1992.
Mr. Hiebert in his report says “There is definitely an impact on the housing market, a key factor behind the phenomenon is many new immigrants arrive in Canada’s major cities with a great deal of money.”
The veteran researcher according to his bio has two main research interests. The first, and most important for him is international migration and at the local scale he studies the consequences of immigration in Canadian cities, highlighting Vancouver’s situation (with a foreign-born population approaching one million).
More specifically, he looks at the integration of newcomers in the labour and housing markets of cities, and how this changes their residential structure and social relations.
Inline with his two main areas of interest, the report is based on analysis of housing and immigration data, for the five year period between 2006 and 2011. The study found on average 53% of immigrants who migrated to Metro Vancouver between 2006-2011 became homeowners in that period.
They bought roughly 100,000 homes in Metro Vancouver during the five years, ranging from suburban condos to ritzy mansions.
“New Chinese immigrants were at the top of all this. Kind of incredibly, their rate of home ownership was 73 per cent,” said Hiebert.
The Real Estate Board of Greater Vancouver (REBGV) reports that 2015 home sales were the highest annual total in REBGV history. This was powered early in the year by four straight months with more than 4,000 sales a month from March to June, another first for REBGV.
Sales of detached, attached and apartment properties in 2015 reached 42,326, a 27.8 per cent increase from the 33,116 sales recorded in 2014, and a 48.4 per cent increase over the 28,524 residential sales in 2013.
To really put Hiebert’s study in perspective and the size of immigrants contribution to housing market in Vancouver, you need to travel back in time.
The Real Estate Board of Greater Vancouver (REBGV) reported that total sales of detached, attached and apartment properties in 2011 reached 32,390, a 5.9 per cent increase from the 30,595 sales recorded in 2010, and a 9.2 per cent decrease from the 35,669 residential sales in 2009.
According to Hiebert study “They bought roughly 100,000 homes in Metro Vancouver during the five years, ranging from suburban condos to ritzy mansions.”
If we divide the 100,000 by 5 – that’s 20,000 homes per year.
In 2009, total sales were 35,669, which puts immigrant buyers at 56% of the entire market.
In 2010 total sales in Vancouver were 30,595, which puts immigrant buyers, mainly Chinese at around 65% of the entire market and in 2011 around 62%.
This says a lot about, what kind of contribution the new immigrant make to the housing market in Vancouver. According to the study, “Roughly 52 per cent of newly arrived South Asians, the second largest immigrant group in Metro Vancouver, bought homes in that same five-year period.”
Chinese top the list of buying properties in Vancouver at 73%, followed by South Koreans at 51% and White/Filipino immigrants at 44 percent.
Hiebert,” believes immigrants are seriously affecting housing affordability at both the high and low ends of the market.” He is not far off if in 2011, 62% of all homes were bought by the immigrants.
“I think it would be a pretty big stretch for someone to arrive tabula rasa (without a lot of money) in a housing market like Vancouver and within five years be able to purchase a home in this place. That would be really difficult to expect,” says UBC geographer Dan Hiebert.
Prices of Metro Vancouver’s expensive properties, those in the $4-million-plus range, are being dramatically affected by immigrants, Hiebert said.
This rise in foreign buyer should even increase further, since Justin Trudeau’s government has shown visible intent with rules like, New Canadians no longer have to intend to live in Canada.
Trudeau government’s did a 360 on Tory policy by slashing residency requirements and gives credit for time spent even as visitors or students
There are estimated to be almost 300,000 existing Canadian citizens in Hong Kong most of whom also have ties including properties in Canada.