Are Foreign Investors to Blame for the Price Growth in Vancouver?
If you are from Vancouver, I guarantee that you have heard someone complaining at a party or over dinner about foreign investors killing the Vancouver market. Foreign investors take a lot of flack in Vancouver and are generally blamed for the rise in home prices in recent years. The unease is completely understandable as the average single-detached home in the Greater Vancouver Area now costs $1.1 million dollars. Within the City of Vancouver itself, [the average single-detached house ranges in price from $1.1 million in Vancouver East to $2.6 million in Vancouver West areas defined by the Greater Vancouver Real Estate Board. Using year-to-date sales as a weight, the average single-detached home across the city of Vancouver now costs upwards of $1.86 million.
While it may be easy to blame foreign investors, the data simply don’t support the assertion that they are the main driving force behind price growth in the Vancouver market. Rather, it appears to largely be a home-grown issue – we have fewer single-detached homes now than we did in 2001.
**The city of Vancouver has lost almost two out of every five single-detached homes that existed in 2001!** The average single-detached home in the city of Vancouver now sits at $1.86 million, almost 150% more than the average price just ten years ago
With this in mind, falling supply and re-zoning, rather than rising foreign demand, are likely the main drivers of price growth in the Vancouver market.