Photos: Evan Leeson/Flickr
It’s no secret that Vancouver home prices are high. In fact, they’re among the highest in the world. But why? The average household income in the region is, well, average. According to a new report from The Economist:
A Vancouver family earned a paltry $68,970 total median income in 2011, putting them 23rd out of the 28 major cities in Canada.
So why do prices continue to climb? The Economist says the likely culprit is an influx of foreign, and especially Chinese, capital. But how much of Vancouver’s property market is being fueled by foreigners is unknown as no official body collects data on investor immigrants. Of course that’s not to say analysts haven’t tried to crunch the numbers themselves. As the magazine points out:
One study monitored electricity bills as a way of figuring out how many high-end city-centre condominiums sit empty most of the year. That analysis led to the conclusion that foreign investors own 8 out of every 100 apartments in pricey areas in downtown Vancouver. Another survey tracked where municipal assessments of property values were sent and found that less than 1% was mailed overseas to China.
Earlier this year Canada axed its Immigrant Investor Program, which allowed wealthy immigrants to fast-track their visa applications. The Economist suggests that the fallout from this could soon give analysts more clues to the mystery of the Vancouver housing market, but as we reported in February, there’s no consensus among real estate observers as to the degree of impact the scrapping of the program will have on the local luxury market.