Foreign ownership main culprit for unaffordable housing in Vancouver, a top destination for Chinese funds, ‘unimpeachable’ study says
- A study found a near-perfect 96 per cent correlation between detached housing unaffordability and foreign ownership rates across 14 Vancouver municipalities
- The Canadian city has for decades attracted waves of millionaires and money from mainland China, Hong Kong and Taiwan
A study has found long-sought evidence linking foreign ownership to extreme housing unaffordability in Vancouver, a Canadian city that has attracted waves of Chinese capital and millionaire migrants.
The white paper by Josh Gordon, an assistant professor at Simon Fraser University’s school of public policy, found a near-perfect 96 per cent (or 0.96) correlation between various metro Vancouver municipalities’ price-to-income ratios (a common measure of unaffordability), and the proportion of their detached houses in which at least one owner was a non-resident.
A leading researcher who was not involved in Gordon’s study said its findings were “unimpeachable”: the more that a Vancouver municipality was favoured by non-resident owners, the more unaffordable its detached houses tended to be.
“When I plugged the numbers in it blew my mind … I mean, holy smokes,” said Gordon of the strikingly close correlation.
“This is compelling evidence that when it comes to the extreme ‘decoupling’ [of prices from local incomes] seen in the Vancouver housing market, foreign ownership is the primary culprit,” the paper said.
Vancouver’s housing has long been considered among the world’s most unaffordable. The city ranked second – behind only Hong Kong – in the latest Demographia study of unaffordability in 309 cities around the world, with a price-to-income ratio for all housing of 12.6.