Immigrants help drive Metro Vancouver’s housing market
Immigrants help drive Metro Vancouver’s housing market
In a unique research project, UBC geographer Daniel Hiebert discovered that ethnic Chinese and South Asians become homeowners at a much higher rate than other immigrants and the general population.
“There is definitely an impact on the housing market,” said Hiebert, who believes a key factor behind the phenomenon is many new immigrants arrive in Canada’s major cities with a great deal of money.
The veteran researcher’s exclusive cross-tabulation of housing and immigration data, including between 2006 and 2011, found on average that 53 per cent of immigrants to Metro Vancouver during those five years became homeowners in that period.
They bought roughly 100,000 homes in Metro Vancouver during the five years, ranging from suburban condos to ritzy mansions.
“New Chinese immigrants were at the top of all this. Kind of incredibly, their rate of home ownership was 73 per cent,” said Hiebert.
Roughly 52 per cent of newly arrived South Asians, the second largest immigrant group in Metro Vancouver, bought homes in that same five-year period.
Rounding out the five largest recent newcomer groups during that period, the rate of home buying among South Koreans was 51 per cent and among white and Filipino immigrants it was each about 44 per cent.
Hiebert, who has published major studies on immigration, housing and ethnic enclaves, believes immigrants are seriously affecting housing affordability at both the high and low ends of the market.
Prices of Metro Vancouver’s expensive properties, those in the $4-million-plus range, are being dramatically affected by immigrants, Hiebert said. But, at the low end, so are costs for new Syrian refugee families, who need government subsidies to afford a basic place to live.
While some of the new immigrants who end up classified as homeowners might be among the relatively few who arrive on a family reunification program and join an existing household, Hiebert believes most would be buying homes by transferring large financial resources into Canada.
“I think it would be a pretty big stretch for someone to arrive tabula rasa (without a lot of money) in a housing market like Vancouver and within five years be able to purchase a home in this place. That would be really difficult to expect.”
Hiebert’s findings support the conclusions of UBC’s David Ley, holder of the Canada Research Chair in geography and author of Millionaire Migrants. The Oxford-educated professor has found an “unusually decisive” correlation between high immigration to Metro Vancouver and high home prices.
The overall rate of home ownership among all residents in Metro Vancouver is almost 70 per cent — out of a total 1.5 million households, according to Hiebert’s work.
Based solely on visible-minority status, and disregarding immigrant status, ethnic “Chinese have the highest ratio of home ownership, followed by South Asians,” Hiebert said.
“The percentage of home ownership among Chinese is 81 per cent,” accounting for 290,000 Metro households, Hiebert said. “And South Asians are second at 75 per cent,” or roughly 160,000 households.
“Between these two largest groups, you’ve got much of the immigrant picture, which is why the immigrant picture looks better than the other picture (for non-immigrants),” said Hiebert.
Among smaller ethnic groups in Metro Vancouver, 62 per cent of Filipinos own homes, as do 59 per cent of West Asians (mostly Iranians).
Hiebert, who frequently advises the federal government, said his research did not include studying the rate of home ownership among non-immigrants, long-standing residents of Canada, or whites.
Nor does it delve into the specific effects of foreign ownership on Metro Vancouver housing costs.
And even though Hiebert said the high rate of home ownership among immigrants has a “definite” impact on housing, he said more careful analysis of sales is needed to measure it precisely.
He speculated the roughly 100,000 homes bought quickly by immigrants who arrived in Metro Vancouver between 2006 and 2011 would represent a “reasonable fraction” of all houses sold in that period, adding that proportion could be calculated after learning how many homes sell each year in the region.
Craig Munn, spokesman for the Real Estate Board of Greater Vancouver, said in an interview the average number of houses sold between 2006 and 2011 across the region of Metro Vancouver (which contains 21 municipalities from West Vancouver to Langley) was about 44,000 annually.
That adds up 220,000 home sales over that five-year period, which means the proportion bought by immigrants who arrived in that time alone would be about 45 per cent.
Hiebert, basing his work on novel cross-tabulations of the National Household Survey, found “stark differences” in new immigrants’ home ownership rates between Canada’s three largest cities.
While the home ownership rate in Metro Vancouver was 53 per cent and in Toronto 50 per cent among those who arrived between 2006 and 2011, it was just 23 per cent in Montreal.
“The much lower rate of home ownership in Montreal is ironic, because of course housing can be had for (roughly) 40 per cent of the price of Toronto or Vancouver,” he said.
“When housing prices escalate quickly, people feel they have to dive into home ownership. But there’s no sense of urgency in Montreal.”
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