New study links foreign ownership to unaffordable Vancouver homes
Are non-residents decoupling home prices from local incomes?
A study has found a link between Vancouver municipalities favoured as residential areas by non-residents and high housing unaffordability levels, InkStone News reported.
The price-to-income ratios in various municipalities of the Canadian metropolis appear to be correlates of the proportion of detached residential properties that have a non-resident as an owner, according to a white paper by Josh Gordon, assistant professor at Simon Fraser University’s school of public policy.
The paper, which had not been peer-reviewed before publication last week, found a 96 percent correlation between the municipalities’ price-to-income ratios and the proportion of detached homes owned by non-residents.
More: Canadian condos a hit with non-residents
“This is compelling evidence that when it comes to the extreme ‘decoupling’ [of prices from local incomes] seen in the Vancouver housing market, foreign ownership is the primary culprit,” InkStone quoted Gordon as saying.
Such a high correlation is “rarely seen in social science research,” said Andy Yan, director of the City Program at Simon Fraser University. “It indicates a very strong relationship. So it is the presence of non-resident buyers that is forcing up prices.”
Vancouver ranks second only to Hong Kong as the world’s most unaffordable city for housing, with a price-to-income ratio of 12.6, according to Demographia. The Canadian city has been a popular destination for migrants from China, Hong Kong and Taiwan for several decades.
Recommended
Why everyone is moving to Selangor and Johor: Malaysia’s real estate comeback
Malaysia’s upturn in fortunes is especially prevalent in secondary destinations such as Selangor and Johor
Penang’s silicon boom: How the US-China tech war is supercharging local real estate
Penang’s booming semiconductor industry has created ripples within the local real estate sector
New leader, new opportunities: How Hun Manet is shaking up Cambodia’s real estate game
Hun Manet is overseeing decent economic growth and widening access to the country’s real estate market for foreigners
Singapore embraces inclusive housing reforms amid resilient demand
The Lion City’s regulatory strength continues to exert appeal for international investors