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New foreign investment stats revealed

by CRE on 05 Jul 2017
And other highlights from BC’s latest stats release.

The Government of British Columbia has released its latest land transfer tax data, which contains some interesting trends about that province’s real estate market.

Sales surge

The province recorded 14,824 total transactions in May, which was up from 9,773 in April. It’s also up significantly from the five month average of 10,205.

Foreign sales jump

Foreign purchases of homes in British Columbia were up 68% in May – increasing to 436 from 259 a month prior. The average number of foreign transactions over the past five months was 332.

Despite the increase, the percentage of all purchases by foreign buyers was steady in May.

A mere 2.94% of purchases went to foreign buyers in May, compared to 2.65% in April. Foreign buyers have accounted for 3.25% of all transactions so far this year, according to BC’s land transfer tax data.

Foreign sales tax saw immediate impact

“It turned out that the impact of the tax was much more immediate than in our simulation, owing to sales being brought forward to July to avoid the tax. Indeed, total REBGV sales fell 19 per cent in August 2016 compared to our projection of just 8 per cent,” BCREA said in its quarterly forecast. “However, since then, sales have evolved broadly as expected in our scenario analysis. In fact, since the end of 2016, other than a weather-induced blip in January, home sales have been on an upswing and are where we would have expected them to have been at this point, without the tax.

“Some of that added momentum in the market is due to a return of some foreign buyers, though to less than half of the levels observed in the summer of 2016.”

BC Real estate to maintain record

The province is forecasting a third consecutive year of more than 100,000 transactions, according to the British Columbia Real Estate Association.

"The province is in its fourth year of above-trend economic growth," said Cameron Muir, BCREA Chief Economist. "Strong employment growth, consumer confidence and an influx of inter-provincial migrants are important drivers of the housing market this year."

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