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Ian Young

Vancouver’s long-suffering affordable housing advocates could be forgiven for jubilation at the news this week that provincial authorities were finally studying the impact of foreign investment on the city’s real estate market.
But as with any property deal, it all hinges on the fine print.
The study was revealed by The Province newspaper’s star investigative reporter Sam “Scoop” Cooper on Sunday, and later confirmed by BC Premier Christy Clark.
The exact framework and scope of the study - which is being handled by BC Housing, a crown corporation - hasn’t been made public, although The Province cited a focus on foreign home ownership.  
And that worries me.

Because the outcome of any study that focuses on foreign owners - while ignoring foreign wealth and earnings brought to Vancouver by immigrant buyers (including Canadian citizens) - seems predestined. Such a study would likely be a rip-roaring success if the goal is to produce reassuringly scant evidence of foreign ownership (and inspiring market boosters to shout “case closed!”, screwball comedy style).
But it’s thoroughly pointless if the goal is to actually work out why, say, the moss-covered hovel pictured hereabouts can be realistically priced at C$2.4 million, or HK$13.3 million (OK, the interior isn’t bad, and it’s in a great neighbourhood). This price is about average for a detached house in the City of Vancouver, and  Greater Vancouver’s average is C$1.83million, a ludicrous 50 per cent increase since mid-2014.  
Regular readers of the Hongcouver blog should feel free to tune out at this point. You’ve heard it  before (and, on a side note, I really want to write about something other than real estate and affordability).
Yes, there is already plenty of data - long-term, peer-reviewed academic research, as well as reams of non-peer-reviewed work - that all points to the key role of wealthy and foreign-earning immigrant buyers on Vancouver’s housing market. Yes, the vast majority come from China.
But no, none of it suggests that these buyers are truly “foreign”, that is, neither Canadian residents nor citizens. Let me repeat: There is no evidence that foreign buyers play a great role in Vancouver’s housing market. Foreign money is an entirely different story.

Let’s go through it. In 2010, UBC prof Dr David Ley published peer-reviewed research that found international immigration (as opposed to inter-city or inter-provincial migration) had an “unusually decisive” 94 per cent correlation to home prices in Vancouver. No true foreigners to see here.
The same year, Dr Markus Moos and Dr Andrejs Skaburskis (of UBC and Queens University respectively, at the time) conducted peer-reviewed research on the “globalisation” of Vancouver’s housing market which revealed “a de-coupling of local housing from labour markets as recent immigrants' housing consumption became less tied to their local labour market participation”.
“Labour market income measured in national datasets becomes less instructive in explaining housing market outcomes and neighborhood change if immigrants arrive with established wealth and continue to earn unreported income outside the country,” they conclude.
And nope. These are not foreign owners.

Then there are the non-peer-reviewed “Chinese name” studies by Andy Yan, Landcor, Reuters and Macdonald Realty (here and here), conducted from 2008 to 2015. All had thoroughly consistent outcomes: that folk with non-Anglicised Chinese names play a massive role in detached buying - making up 66 per cent of C$2 million-plus buyers and 85 per cent of C$3million-plus buyers in the Westside neighbourhoods Yan studied, for instance.
Yet according to the 2006 Census, only 15 per cent of residents in Metro Vancouver spoke any form of Chinese as a mother tongue.
Again, this disparity and all of these studies point squarely to the role of recent high-wealth immigration.
But no – there is no indication that these buyers are “foreigners”.

Limiting the provincial study to foreign ownership simply will not suffice if Vancouverites want more data on what actually propels their city’s remarkable real estate market and unaffordability. It won’t prove any more illuminating than last year’s bogus “less than 5 per cent” appraisal by the BC Real Estate Association, upon which Christy Clark’s government has previously relied.
On the other hand, Ley, Moos and Skaburskis are heavy-hitting, big-brained, research-founded academics, who have studied this stuff under the harsh glare of peer review for years. Do we trust them? Or do we trust the outcome of an opaque government study, the confirmation of whose very existence required the efforts of an investigative reporter?
*
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 ian.young@scmp.com or on Twitter, @ianjamesyoung70.


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Hongcouver

Studying ‘foreign ownership’ in Vancouver won’t explain why this mossy hovel costs C$2.4million

In its defence, this C$2.4million dump looks less mossy from the front. And it's in a great Vancouver neighbourhood. Photo: Kavanagh Group

There, that's better. Sort of. A front view of Vancouver's 4453 West 14th Avenue, in all its C$2.4 million glory. Photo: Kavanagh Group

Doctors Markus Moos, Andrejs Skaburskis and David Ley have all studied Vancouver's housing market, producing peer-reviewed research that points to the link between the city's prices and wealthy and foreign-earning immigrants.

This graph from David Ley’s book, "Millionaire Migrants", dramatically depicts how Vancouver home prices and international immigration to the city have moved in near lockstep (1977-2002).

Urban planner Andy Yan, acting director of Simon Fraser University's City Program, found that a large majority of detached homes in the three Westside neighbourhoods he studied were bought by people with non-Anglicised Chinese names. Photo: Bing Thom Architects 

Canadian securities regulators review Vancouver real estate ‘crowdfunders’ after SCMP report

A combination photo shows Sun Commercial Real Estate vice-president Julia Lau (left, centre) with performers at a Great Gatsby themed party held by the firm last summer in Vancouver; and Jason Liu, CEO of Luxmore Realty, at a Vancouver "crowdfunding gala" last year. The man with Liu is unidentified. Photos: Facebook, Luxmore

The three-hectare Molson Coors factory site in Vancouver was reportedly sold for C$185 million. Photo: Google Earth

Properties listed on the members-only website of Luxmore Crowdfunding included golf courses in the Vancouver area and the Okanagan, before the site was taken offline this week.

Racism, rogues, real estate: key players and cameos in Vancouver’s year of living unaffordably

All enjoyed their turn in the spotlight, in the drama that was Vancouver's property scene in 2015: (Clockwise from top left) UBC's Tsur Somerville, duck farmer turned mega-mansion buyer Chen Mailin, affordability advocate Eveline Xia, urban planner Andy Yan, non-economist Philip Soos and condo marketer Bob Rennie. Photos: Global TV, Baidu, SCMP Pictures, Bing Thom Architects, Twitter, Rennie Marketing Systems

Some of the previous sponsors of Tsur Somerville's Centre For Urban Economics and Real Estate. 

An aerial view of Chen Mailin's Point Grey estate, purchased for an eye-watering C$51.8 million. 

Affordability advocate Eveline Xia's photo, that kicked off the #DontHave1Million movement. Photo: Twitter

Vancouver's Mayor Gregor Robertson was quick to support Bob Rennie's plan for a tax on real estate speculators. 

Philip Soos (left) and his fellow non-economist Lindsay David. Photo: Twitter

Data compiled by urban planner Andy Yan pointed to a decisive role played by foreign (ie: Chinese) money in Vancouver's property market. Graphic: Andy Yan

Bob Rennie likened the Don't Have 1 Million movement to “these girls … wanting affordability to be a party game”. Photo: Rennie Marketing Systems

Where is Vancouver’s Chinatown? Don’t look for an address, look for the connections that bind a community

A scene from award-winning director Julia Kwan's 2014 documentary on the transformation of Vancouver's Chinatown, "Everything Will Be". Photo: Julia Kwan/Everything Will Be 

The Beedie Development Group's planned 13-storey project at 105 Keefer Street. Photo: Beedie Development Group

Chinatown activist Yuly Chan says the gentrification of Chinatown has spurred the displacement of longtime residents and businesses. Photo: Access Community Television

The elderly residents of Chinatown are a key focus for activists concerned about the district's future. Photo: Julia Kwan/Everything Will Be 

Activists and residents gather at 105 Keefer Street ahead of a meeting on the project in October. Photo: Access Community Television

Ethnic Chinese housing researcher defends work, as Vancouver’s white mayor cries 'racist'

Prominent Vancouver urban planner Andy Yan found that two-thirds of house buyers in some of the city's priciest neighbourhoods had "non-Anglicised Chinese names". Photo: Bing Thom Architects/Andy Yan

Vancouver mayor Gregor Robertson said he was worried about the housing study's "racist tones". Photo: K.Y. Cheng

The single most-common occupation among buyers of the homes covered by the study, whose average price was more than C$3 million, was homemaker/housewife. Graphic: Andy Yan

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The Hongcouver | Studying ‘foreign ownership’ in Vancouver won’t explain why this mossy hovel costs C$2.4million