Millionaire migration to Canada didn't fall after investor scheme's axing - it rose, new data reveals
Quebec investor migrant approvals rapidly accelerated last year, counteracting Ottawa's wind-down of federal IIP, latest immigration statistics show
If you believe Vancouver’s crazy real estate prices have something to do with foreign money, the behaviour of the market in 2014 was a bit of a head scratcher.
It was last year that Ottawa turned off the tap of its millionaire migration scheme, the federal immigrant investor programme (IIP), which has been dominated by rich mainland Chinese. Announced last February, the closure came into effect last summer.
So what did prices do? Fall off a cliff? Not exactly: 2014 was another bumper year, with Metro Vancouver prices up 5.8 per cent, according to the Real Estate Board of Greater Vancouver’s composite benchmark price. Detached homes, supposedly favoured by rich immigrants, enjoyed an 8.1 per cent increase under this metric.
Naysayers to the foreign-money theory of Vancouver real estate unaffordability probably delight in these facts.
But a new set of data that landed on the Hongcouver blog’s desk this week provides some eye-opening clarification.
Citizenship and Immigration Canada (CIC) spreadsheets demonstrate that, yes, immigrant investor visa approvals under the federal IIP plunged 42 per cent as the scheme wound down, falling to a mere 2,541 applicants and family members in 2014.
Yet, astonishingly, overall investor immigrant approvals nationwide were up by 7.2 per cent, hitting 8,762 approvals, the most since 2011.
How? Because, even while Ottawa was hitting the brakes on millionaire migration, the province of Quebec (which runs its own IIP) was hitting the accelerator. And l’accélérateur was winning.
In 2014, Quebec approved a bumper 6,221 millionaire migrants and family members, a whopping 62 per cent increase compared to 2013. It was a near-record year, surpassed only by the 6,292 approvals in 2011.
Quebec’s programme matters to Vancouver, because 89 per cent of Quebec investor immigrants do not end up living there, according to federal data. Most likely end up in Vancouver, assuming those 89 per cent disperse in a fashion similar to their counterparts in the federal scheme.
At this point thanks should go to Richard Kurland, the Vancouver immigration lawyer who has been a relentless pursuer of data that CIC does not prefer to release as a matter of course. The CIC spreadsheets that he shared with me this week were only obtained under access to information requests.
The spreadsheets demonstrate in clear fashion how Quebec has historically approved a majority of Canada’s millionaire migrants, and has likely approved a majority of those who end up in Vancouver. From 2002 to 2014, Quebec approved 65,151 investor migrants, compared to 45,294 okayed under the federal IIP.
The new data lets us refine assumptions about millionaire migrant arrivals in BC, from 2002 to 2014. There were 22,727 approved to move to BC under the federal IIP from 2002-2012, representing 59.2 per cent of all federal approvals. The new data shows there were a further 6,888 federal approvals in 2013 and 2014; if we apply the 59.2 per cent assumption (Kurland’s new data does not provide a province-by-province breakdown), that results in a further 4,078, BC bound. That brings us to an estimated 26,805.
To the 65,151 QIIP approvals, we multiply by the 89 per cent who leave Quebec, then the 59.2 per cent of these who likely end up in BC: that’s an estimated 34,327 QIIP immigrants moving to BC from 2002 to 2014 [to be clear: a great many of these do not show up in BC Stats arrival data here, which only lists those who boldly activate residency in BC. BC Stats data omits those who activate residency in Quebec, then move to BC].
That’s a total of 61,132 BC-bound millionaire migrants from 2002-2014. It’s napkin maths, but it’s a good ballpark figure. Narrowing it to the past 10 years, it’s an estimated 52,096 individuals, or 14,315 households.
[That’s a small number compared to the average 29,000 annual real estate transactions in Metro Vancouver in, say, the past three years, but their impact on affordability must be multiplied by their greater spending power - with these households latterly worth a minimum of C$1.6 million – and by the total number of purchases the householders make over the course of their lifetime tenure in Vancouver, not just upon arrival, that are funded by foreign wealth or earnings. Very few ever declare much income at all, locally]
Using these same assumptions, BC-bound approvals appear to have increased by 4.2 per cent between 2013 and 2014, from an estimated 4,590 in 2013 to 4,782 last year. It's also 7 per cent higher than the 4,470 estimated arrivals in 2012.
Meanwhile, another wrinkle to the Vancouver real estate riddle comes from the abject failure of the federal government’s new Immigrant Investor Venture Capital scheme to appeal to rich would-be immigrants, reported by the SCMP this week.
But the impact of this upon arrivals will be muted at best, since Kurland’s data also shows there remains a substantial backlog of 12,319 people, or 3,415 households, in the Quebec IIP queue, as of January 5 this year. A remnant 181 federal IIP applicants await processing too.
Combined with a share of the 1,750 new IIP households that Quebec hopes to attract each year, and that is enough to keep millionaire migration flowing to Vancouver at 1,400 households per year for at least the next four years - almost exactly the same average level as it has experienced for the past decade. The wealth migration story for Vancouver is far from over.
The Hongcouver blog is devoted to the hybrid culture of its namesake cities: Hong Kong and Vancouver. All story ideas and comments are welcome. Connect with me by email email@example.com or on Twitter, @ianjamesyoung70.