“This is like a Polaroid image … As we see the image emerge, are we going to like what comes out of it?”
As the picture of foreign property ownership in Vancouver comes into clearer focus, new analysis shows non-residents of Canada own a much bigger proportion of local housing than previous official reports, with at least $75-billion worth of Vancouver-area residential real estate tied to offshore owners.
It wasn’t long ago that high-profile figures, in both industry and government, played down the role of foreign homebuyers in Vancouver’s housing market, using the information available at that time. Addressing the Greater Vancouver Board of Trade in November 2016, Canada Mortgage and Housing Corp. president Evan Siddall said it would be “convenient” but divisive and wrong to blame foreign buyers for skyrocketing prices, and, to bolster his point, cited recent CMHC data showing offshore buyers owned only 2.2 per cent of Metro Vancouver’s condos.
Now, using new methodology and more data, a report this month from the CMHC shows about 11 per cent of Metro condos are owned, at least in part, by people living outside Canada. Drilling further into this month’s data release, Andy Yan, director of Simon Fraser University’s City Program, found the percentage is higher still in certain segments of the market: Of recently built condos in Richmond, for example, one-in-four has a non-resident owner.
Of the $965-billion worth of residential real estate in the Vancouver census metropolitan area, $75 billion is tied to at least one non-resident owner, Yan found. And, in Vancouver, non-residents of Canada are involved in the ownership of at least $34-billion worth of residential real estate, about 10 per cent of the $341-billion total in the city.
Apples-to-apples comparisons over the years are difficult because methodologies have changed. But these figures reflect significant increases, in both total dollar value and percentages, since the CMHC data cited by Siddall in 2016. Previously, the CMHC tried to determine the percentage of foreign ownership of condos via phone interviews with building managers and strata boards, a method Yan describes as “fraught.”
These new numbers come after, by many accounts, foreign buyers’ interest in Vancouver real estate has already been waning, since the B.C. government’s 2016 introduction of the foreign-buyers tax, followed by the City of Vancouver’s empty-homes tax taking effect in 2017. There are, of course, other factors influencing local real estate at the federal level and beyond; like Vancouver, some other formerly scorching urban housing markets from Asia to Australia have also cooled recently.
December 2017 brought the first release from the Canadian Housing Statistics Program (CHSP), an initiative supported by both Statistics Canada and the CMHC. While that release made international headlines and was hailed as the most comprehensive study to date on foreign ownership of Canadian real estate, the director of the new StatsCan division overseeing the CHSP told The Vancouver Sun at the time that it represented the “tip of the iceberg.”
This month’s CHSP release further refines the picture. One significant change this year is the CHSP research tracked homes in which at least one non-resident is an owner, instead of only counting those where a majority of owners were non-residents, as they did in the 2017 report.
It’s impossible to know now how the actual picture of property ownership changed between 2016 and today. But the image we have today is clearer, representing “an evolution of our understanding of this phenomenon,” said Eric Bond, a CMHC market analyst and one of the authors of this month’s report.
“There are data gaps in our knowledge of different phenomena in the housing market, so that’s why CMHC and Statistics Canada are looking to close those, so we can have an informed public discussions about these phenomena of interest,” Bond said this week. “We do strongly believe that the best decisions and debates are based on data and evidence, so that’s what we’re looking to provide.”
Around the time in 2016 when Siddall was citing his own agency’s research to play down the issue of foreign ownership, he was far from the only high-profile figure doing so. Many, like previous Vancouver mayor Gregor Robertson, shifted their public positions on these issues in recent years.
It’s also impossible to know what might have been different, if voters, bureaucrats and elected officials alike had access three years ago to this clearer picture. We don’t know what policy decisions or priorities might have looked like at the municipal, provincial or federal level.
But the hope, at least, is that a more clear picture will lead to more informed discussion going forward.
There’s still a lot we don’t know. “Non-resident” property owners, for the purpose of the study, includes both foreign nationals and Canadian citizens living abroad, although we don’t currently know what proportion each of those categories represent. And while the CMHC tracks properties owned by corporate entities, the data doesn’t currently reveal how many of those Canadian-registered corporations have directors or owners based overseas.
Yan, in particular, has been working for more than a decade to get a more clear idea of foreign property ownership in Vancouver, and its impacts on local residents.
“This is like a Polaroid image,” Yan said. “As we see the image emerge, are we going to like what comes out of it? … It’s taken 10 years to develop this picture, and now that we have it, what are we going to do, when one-in-five of our new condos are being purchased by those who don’t even live in the country?”
B.C. residential real estate Five things to know
Almost 73 per cent of detached homes sold in Vancouver in the first nine months of 2019 went for below assessed value, while Kitimat and the Kootenays are booming
Province wide real estate figures released this week by Landcor Data Corporation compared all residential sales for the first nine months of 2019 with the same period last year.
It breaks down sales numbers, sale prices, sales volumes and what percentage of sales were above or below the assessed value — a gold mine of information for any homeowner.
Here are five interesting things to know:
1. Let’s start with Vancouver
Most of the horror stories around money being lost in residential real estate are based on sales of high-end detached homes in the province’s largest city.
Using detached homes as a bellwether, Landcor data shows that the value of a detached home in the city fell 11.3 per cent for the first nine months of this year compared to last, with the median price now being $1.825 million.
There were 1,172 detached homes sold from the start of January to the end of September this year, compared to 1,448 for the same period in 2018. The value of those sales fell from $3.8 billion to $2.76 billion. Almost 73 per cent of detached homes sold in Vancouver in the first nine months of 2019 went for below assessed value.
Condo owners in Vancouver saw a 3.3 per cent rise in the median price on 30 per cent fewer sales.
2. LNG boom in Kitimat leads to huge jump in home values
There’s an energy boom underway in northwest B.C., driven by a $40-billion LNG project in Kitimat. There are already 1,000 workers setting up the construction site at the mouth of Douglas Channel, with 7,500 workers expected from 2022 to 2024. That creates a big need for housing and its shows in the data.
In Kitimat, the price of a detached home jumped almost 50 per cent in the first nine months of the year compared to the same period in 2018. While the number of detached home sales actually fell from 99 to 91, the value of those sales soared from $28.1 million to $38.7 million, and only two homes sold for less than assessed value.
Nearby Terrace saw a 21 per cent increase in the value of a detached home to an average of $385,000.
3. How are things in Surrey?
While owners of detached homes in Surrey fared better than in Vancouver, condo owners fared worse. There were 2,201 detached homes sales in the first nine months of 2019, a 22 per cent drop on the same period of 2018. Sales volumes were $2.7 billion for the same period compared to $3.6 billion. Interestingly, that shows that the total sales volumes in Surrey and Vancouver for detached homes are about the same.
The median price of a detached home fell three per cent to $1.038 million, while the median price of a condo was down 9.3 per cent to $365,700. Just over 50 per cent of detached homes sold in Surrey for the first nine months of 2019 went for below the assessed value.
4. The beautiful Kootenays are doing OK
A common refrain in Vancouver is “I’d love to live in Nelson.” It’s the Jewel of the Kootenays, rural with city touches, a world-class ski hill nearby and a reputation for cool known around the world.
The Landcor data shows several Kootenay towns doing well on the real estate front. In Nelson, the median price of a detached home rose 11.4 per cent to $440,000 — and despite the average assessed value of a detached home rising 16 per cent from 2018 to June 30, 2019, over 65 per cent of the homes sold in the first nine months of 2019 went for over assessed.
Salmo and Slocan saw a 27 per cent jump in detached home values, while Creston went up 10 per cent and Castlegar 11 per cent.
5. Victoria not so hot, but Langford is
Victoria has seen detached home values fall, though not as much as Vancouver. A detached home is now worth $790,000 on average, which is 4.8 per cent less than in 2018. Volumes are down slightly, with 171 sales in the first nine months of this year; almost 80 per cent of those sales were below the assessed value.
But west of Victoria, in Langford, detached home values soared 12 per cent in the same period, while detached homes in the Gulf Islands rose 19 per cent in average value.
The Canadian Real Estate Industry Just Jumped The Biggest sales In October over 10 Years
Canadian real estate markets are on fire. Canadian Real Estate Association (CREA) data shows sales across the country jumped in October. The rise was actually so large, last month was the biggest for the industry in over a decade. This is the opposite of what the government wants to see ahead of rolling out new demand stimulus.
Canadian Real Estate Sales Rise Over 12%
The headline number used by the industry is seasonally adjusted, which downplayed growth. There was 42,970 seasonally adjusted sales in October, flat from a month before. Unadjusted however, sales reached 44,499 in October, up 12.9% from the same month last year. FYI seasonally adjusted numbers are compared using consecutive periods. Unadjusted numbers are compared on a year-over-year basis.
Canadian Real Estate Sales
The unadjusted sales for all home types, as reported through the Canadian MLS.
Source: CREA, Better Dwelling.
The growth rate is very high, and this is also a new record. The 12-month growth is the highest for October since 2011. The number of sales reported for the month is also the highest since 2007. Some of this is delayed demand from last year’s weak numbers, but it’s still a very large month.
Canadian Real Estate Sales Change
The annual percent chage of unadjusted sales for all home types, as reported through the Canadian MLS.
Source: CREA, Better Dwelling.
British Columbia’s Largest Markets Lead In Growth
The largest growth was in last year’s biggest losers – Vancouver and Fraser Valley. Vancouver reported 2,892 sales in October, up 45% from the same month last year – the biggest jump in the country. Fraser Valley, the neighboring board, followed with 1,500 sales, up 36% from last year. In a distant third was Ottawa at 707 sales, up 25.4% from last year. Both BC markets were near multi-year lows last year, so the jump was a little expected.
Canadian Real Estate Sales By Market
Canadian real estate sales in markets with more than 450 sales in the month.
Source: CREA, Better Dwelling.
Biggest Losses Were In… Wait, There Was None
That’s right kiddos, not one major market showed a loss from last year. Kitchener-Waterloo showed the smallest gain at 502 sales in October, up 2.7% from last year. London follows with 924 sales, up 2.8% from last year. Victoria came in third with 586 sales, up 5.4% from last year.
Canadian Real Estate Sales Change By Market
The percent change in Canadian real estate sales, in markets with more than 450 sales in the month.
Source: CREA, Better Dwelling.
All of Canada’s largest real estate markets pumped out massive gains. Curiously, the rise in sales is not isolated to “hot regions,” it’s a broad market gain. This implies a more macro change to buyer pressure.
Real estate developers are slow to make buildings 5G-enabled
Super fast 5G cellular networks are hot as major wireless carriers from Verizon to AT&T deploy the service, but it’s unclear if the infrastructure is in place for in-home 5G to replace current cable-based broadband.
The 5G-enabled future seems kind of distant. Real estate developers would need to put fiber-optic cables in homes and office buildings, since 5G doesn’t pass through walls, windows, or people. And most developers are not constructing projects or retrofitting existing properties that would allow 5G to be delivered to homes because it’s simply too expensive to implement.
“Not many developers that we speak to are taking 5G into account when constructing new ground-up developments,” said Chen Konfino, founder of Younity, a Tel Aviv-based company that installs internet infrastructure in multifamily buildings.
<p class=”canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm” type=”text” content=”Fiber-optic cables, which run through the walls and the floors of buildings, are required to receive 5G signals indoors, according to Dan Littman, principal of technology, media and telecommunications at Deloitte Consulting LLP. And only some developers like The Related Companies are willing to pay for the infrastructure. Related’s massive Hudson Yards 28-acre mixed-use development in New York City is wired for 5G.” data-reactid=”18″>Fiber-optic cables, which run through the walls and the floors of buildings, are required to receive 5G signals indoors, according to Dan Littman, principal of technology, media and telecommunications at Deloitte Consulting LLP. And only some developers like The Related Companies are willing to pay for the infrastructure. Related’s massive Hudson Yards 28-acre mixed-use development in New York City is wired for 5G.
“Installation is too pricey” data-reactid=”39″>Installation is too pricey
Most builders just opt for traditional internet solutions because it’s affordable. Between conduits, splices, cables, and installation, 5G capability can be a five- or six-figure investment.
From 2003 to 2017, the median budget for a fiber-optic cable installation project, ranging from .6 to 10 miles of cable, was $66,940, according to a U.S. Department of Transportation survey of 150 fiber optic installations. Konfino said he recently completed two fiber-optic cable installations in 30- to 40-foot buildings for about $100,000 each.” data-reactid=”41″>From 2003 to 2017, the median budget for a fiber-optic cable installation project, ranging from .6 to 10 miles of cable, was $66,940, according to a U.S. Department of Transportation survey of 150 fiber optic installations. Konfino said he recently completed two fiber-optic cable installations in 30- to 40-foot buildings for about $100,000 each.
Even retrofitting existing buildings is a pricey endeavor. It costs about 30% more than a regular renovation, taking into account demolition, renovation, and improved telecommunication closets, said Konfino. And the costs skyrocket when a building is more than a mile away from the closest fiber-optic internet line, according to a post by Atlantech, a Maryland-based fiber optics and telecommunications company.” data-reactid=”42″>Even retrofitting existing buildings is a pricey endeavor. It costs about 30% more than a regular renovation, taking into account demolition, renovation, and improved telecommunication closets, said Konfino. And the costs skyrocket when a building is more than a mile away from the closest fiber-optic internet line, according to a post by Atlantech, a Maryland-based fiber optics and telecommunications company.
“The return on investment” data-reactid The return on investment
As one of the few developers making 5G-enabled properties like Boston’s Lovejoy Wharf luxury condominiums and New York City’s Equinox Hotel, Related said the high costs are worth the investment.
“Expense is always a factor. We would never mindlessly invest in infrastructure that we didn’t think would be foundationally important,” said Scott Evans, chief digital officer of Related. Fiber-optic cables will only become increasingly necessary as the infrastructure behind future innovations, added Kenneth Finnegan, chief technology officer of Related.
Fiber broadband cuts down on long-term maintenance costs for building owners. It also allows owners to charge more rent and increases the value of properties. According to Connected Real Estate Magazine, owners can increase rent by an average of 8% and property values are boosted by an average of 2.8%, if the properties are 5G-enabled. ” data-reactid=”66″>Fiber broadband cuts down on long-term maintenance costs for building owners. It also allows owners to charge more rent and increases the value of properties. According to Connected Real Estate Magazine, owners can increase rent by an average of 8% and property values are boosted by an average of 2.8%, if the properties are 5G-enabled.
“I think there’s going to be a price concern for landlords and property owners, but I think there will be a demand for this infrastructure,” said Mike Baumstein, deputy head of Barings’ Private Equity and Real Assets team, an investment firm that recently bought Gigasphere, a fiber-optic telecommunications company serving the multifamily and commercial real estate industries. “Eventually, they [building owners] will have to make an investment to keep their properties updated and competitive.”
But smaller developers still say the cost is too high. Josh Schuster at New York-based Silverback Development uses traditional methods like routers and cell phone repeaters that allow only 4G into buildings, according Schuster.
“There is a cost-benefit analysis. Right now, there are inexpensive ways to include technology in design and construction,” he said. “We definitely incorporate that.”
Arts, culture, fun in London this weekend and beyond (Nov. 21-27) – The London Free Press
Photos Show Evidence of Life on Mars, Claims Scientist – NDTV
Art gallery sending artist from the Rock to the Emerald Isle – CBC.ca
Starlink Satellites Posing Issues For Astronomers – Hackaday
After Hiatus, Trump Awards National Arts and Humanities Medals – The New York Times
This Is How Elon Musk Can Fix The Damage His Starlink Satellites Are Causing To Astronomy – Forbes
Resumes360.com: Resume Layout Pro
‘This Is Not Cool!’ – Astronomers Despair As SpaceX Starlink Train Ruins Observation Of Nearby Galaxies – Forbes
CN strike could hit country hard
Elon Musk's satellites are starting to really annoy astronomers – Wired.co.uk
Canada voted for a UN resolution in support of Palestinians’ right to self-determination
An Entomologist Claims That Mars Is Covered in Bug-Shaped Things, And He Has 'Proof' – ScienceAlert
Beaux Arts Bazaar runs until Dec. 24 in Quesnel – Quesnel Cariboo Observer
Next phase of transit job action to be announced Wednesday
Chinese Mars rover completes landing trial ahead of 2020 launch – Spaceflight Now
Woman in furious rant about rainbow poppies for ‘gay soldiers only’
Window washer rescued from a dangling suspended scaffolding outside Edmonton’s Stantec Tower
Influential curator championed Canadian art
Some bus service will be cancelled due to the transit strike, states TransLink
Search for missing teenager Alexandre Baron ends in tragedy
Angry Pettersson, sniping Boeser unleash full wrath in Canucks win
Social worker stabbed to death in Calgary
Splash: Arts Umbrella's 37th annual art auction and gala – BCBusiness
Vulgar slur painted across MP Catherine McKenna office
Doug Ford government pledges to be on better behaviour
Maxar Delivers Robotic Arm for NASA's Mars 2020 Rover – Financial Post
In first, spacewalk conducted by two women: NASA TV – Digital Journal
The sudden death of Saskatchewan curler Aly Jenkins
Art Toronto fair mixes culture and commerce
Plea brings abrupt end to Whitby martial arts coach’s sex assault trial – Toronto Star
- Science4 days ago
Alpha Monocerotids outburst may produce a meteor storm next week
- Science4 days ago
Spectacular Meteor Outburst Expected Very Soon – Webby Feed
- Technology2 days ago
Samsung’s Star Wars-themed Galaxy Note 10 Plus
- Technology3 days ago
13-inch vs 16-inch new MacBook Pro
- News6 days ago
Ron MacLean ponders his future
- Arts7 days ago
Heritage Woods grad in Arts Club premiere – The Tri-City News
- Real Estate6 days ago
Kelowna named best city for real estate investment
- Technology3 days ago
Apple finally admits iPad Pro won’t replace your PC