Photo: Ruth Hartnup/Flickr
Metro Vancouver’s foreign-buyer tax has been in place for nearly four months, and the BC government has now released the third round of foreign investment data since it was instated. Like the first and second rounds, it shows that foreign-buyer activity in the area is now significantly lower than it was before the tax was introduced.
The new data covers the month of October, and shows that during that time about 4,700 residential real estate transactions valued at $3.6 billion took place in Metro Vancouver. Of those deals, only 3 per cent, or 140, involved foreign buyers.
That’s slightly higher than the 0.9 per cent seen in August and September’s 1.8 per cent, but much lower than the 13.2 per cent of Metro Vancouver residential real estate transactions that involved foreign buyers from June 10th to August 1st. June 10th is the day the BC government began collecting data on foreign buyers.
Chart: Province of BC
According to the BC government, some variation in sales numbers is to be expected in the tax’s early days. “There is a period of distortion in the market any time a tax is introduced or changed. Many transactions that would have occurred in the months following the introduction of the tax were moved to July to avoid the tax,” it says in a press release.
“As time goes on and the market readjusts, trends such as the rate and volume of foreign demand will normalize to levels we can expect to continue,” the release also notes.
Within Metro Vancouver, different cities saw varying degrees of foreign-buyer involvement. For instance, while in Vancouver 2.5 per cent of residential real estate deals involved foreign buyers, in neighbouring Burnaby the number was higher at 5.9 per cent. Further afield in Surrey and Richmond, foreign buyers were involved in 1 per cent and 6.7 per cent of deals, respectively.
Chart: Province of BC
The data also shows that foreign-buyer activity has fallen slightly in the rest of BC, where the foreign-buyer tax does not apply. In October, 2.9 per cent of all BC residential real estate deals outside Metro Vancouver involved foreign buyers compared to 3.6 per cent from June 10th to August 1st. In total, 3 per cent of all BC transactions involved foreign buyers last month.
The BC government plans to continue to release data on foreign investment in the province on a monthly basis. It now expects the tax to generate $50 million this year, down from an initial estimate of $165 million.