In a recent analysis that the National Banking Financial conducted, figures reveal that one-third of real estate investment in the Metro Vancouver area comes from offshore investors.
According to CTV News Vancouver, the NBF Daily Bulletin released last week indicated that 33 percent of total homes purchased in the region in 2015 are from Chinese buyers, accounting to an estimated $12.7 billion transactions.
While the figures seem impressive for the industry, having huge amount of capital injected into the market, these also have adverse effects to average Vancouver family. Tom Davidoff, an associate professor at UBC's Sauder School of Business, said that this pace of property investment makes the prices skyrocket that an average family may not be able to afford owning a home.
"Whether it's a third, or a half, or a quarter, I don't think anybody doubts that outside capital is driving up prices, certainly on the west side of Vancouver and probably throughout the region," Davidoff told CTV News Vancouver.
"The estimated share of purchase volume seems high and we stress this methodology is truly a back-of-the-envelope attempt at gauging the significance of capital inflows from mainland China on the local residential real estate markets in Toronto and Vancouver," explained Peter Routledge in the NBF bulletin.
"The surveys upon which we base our hypotheses could have built in biases that overstate (or understate) the amount of capital inflows into Canadian and U.S. residential real estate markets."
Meanwhile, Vancouver house prices are reaching new heights significantly driven by the shortage in housing supply. According to CBC News, the B.C. Real Estate Association said the city is experiencing an "accelerated" market. Multiple Listing Service (MLS) sales data last month showed sales of condos, townhouses and attached properties outpacing new listings. The supply is draining fast and it's getting difficult to grab a modest home in the city.
