Barbara Yaffe: Asia Pacific Foundation taking on issue of foreigners’ home buying

The Vancouver-based Asia Pacific Foundation is diving into the debate surrounding what should be done about foreigners buying property in the Lower Mainland.

The organization, funded by government, corporate and private donors, is reaching out to 20 “thought leaders from across academia, industry, government and media” for ideas, both for their views on the extent of the problem and whether action should be taken. These participants (I am one) are mainly from B.C., with a few from Ontario and Quebec.

The initiative is unusual in that the group describes its mission as acting as “Canada’s catalyst for engagement with Asia and Asia’s bridge to Canada.”

The foundation normally tries to foster greater relations and economic ties between Canada and Asian countries. But in this instance, it is exploring the highly sensitive issue of whether Asian investment in residential property should be curtailed. The foundation, planning to review restrictions already being implemented in other jurisdictions, is not yet certain whether it will produce a report.

It has long been assumed such investment is boosting prices in the local market and making home ownership tougher for locals, be they of Asian, European or any other ancestry.

Explains the foundation’s Michael Roberts: “Our underlying concern is that this is polarizing our communities, and that it is becoming a lightening rod for hostilities across communities. And that does not support a Canada that is a model for tolerance and inclusion.”

The foundation’s research team asserted in an outreach message emailed last week that it is acting “in response to the data and policy vacuum surrounding this issue.”

The email says foreign buying has become “a hot-button topic on the campaign trail and in the imagination of the Canadian public.”

Which it has. Much as local politicians have been reluctant to get involved, federal party leaders are cautiously weighing in on housing policy during the current election campaign, mainly to pitch tax measures to encourage construction of more rental housing.

The closest they strayed to the matter of foreign influence in Vancouver’s property market has been Stephen Harper’s pledge that a Conservative government would start gathering data on offshore buyers next year.

Meanwhile, the foundation is inviting the participants in its “virtual roundtable” to share their knowledge about the level and impact of foreign ownership on residential real estate.

It asks which Vancouver groups are being impacted by real estate sales to foreigners and whether, and how, the situation should be regulated.

Because no agency has systematically collected information on foreign sales, nobody has comprehensive information on its extent.

The firmest data to date comes from:

• University of B.C. geographer David Ley, whose research has shown a definitive connection over time between higher house prices and surges of foreign newcomers to Vancouver.

• Macdonald Realty’s Dan Scarrow, who reported last month that, based on the company’s 2014 records, 70 per cent of Vancouver homes selling for $3 million or more reflected mainland Chinese buying, as did 21 per cent of homes priced from $1 million to $3 million and 11 per cent priced under $1 million.

• Re/Max’s Wayne Ryan, who two weeks ago released data showing 70 per cent of that company’s luxury ($3 million-plus) home sales in the first six months of this year were to foreigners.

• The Real Estate Board of Greater Vancouver, which last June asserted foreign buyers — which it defined narrowly — account for less than five per cent of property transactions.

While a lot of Vancouverites find themselves squeezed out of home ownership by the foreign buying, and are resentful, others see a real advantage in having new money injected into the local market from abroad.

That includes government, benefiting from the Property Transfer and other taxes.

Which may explain why the politicians have been slow to act, creating “the data and policy vacuum” the Asia Pacific Foundation is now trying to address.