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Foreign buyers spending more than Canadians

July 7, 2016

TORONTO (Reuters) – British Columbia said foreign buyers were spending significantly more on homes in the province than Canadians, potentially strengthening the argument for further measures to curb the activity of overseas investors.

The western Canadian province said on Thursday 3.3 percent of home sales involved foreign buyers between June 10-29 and the average investment in a property by a foreign national was C$1,157,000, significantly higher than the C$735,000 average investment by a Canadian citizen or permanent resident.

“The disparity between the average price of a transaction involving a citizen or a permanent resident and the average price being paid by a foreign national purchasing is something we’re clearly zeroing in on to examine and analyze,” Finance Minister Michael de Jong told reporters.

The data was the first to be published as part of a new plan requiring that real estate buyers who are not Canadian citizens or permanent residents identify their country of citizenship.

The role of foreign buyers has become a sensitive issue in the province, particularly in Vancouver which is Canada’s most expensive property market. Many residents believe foreign buyers, especially from China, are driving price rises and hurting affordability, but until now there has been little hard data to back that up.

De Jong said the publication of the data had demonstrated the level of influence that foreign buyers are having.

“It is real, it is actual, it is factual and it is beyond conjecture… I attach importance to the data and we’re going to approach it with an open mind,” he said.

The province announced in February new measures aimed at tackling its red hot real estate markets, including adding a higher tier to the property transfer tax as well as the plans to collect citizenship data from home buyers.

De Jong said the province intended to publish the data monthly.

(Reporting by Matt Scuffham; Editing by G Crosse and Andrew Hay)

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