VANCOUVER – Researchers say they’ve uncovered for the first time concrete, empirical evidence linking foreign investment to real estate prices in Vancouver.
A study spearheaded by SFU business professor Andrey Pavlov looks at a now-defunct federal program designed to entice investor immigrants to Canada and the impact its suspension had on the housing market in neighbourhoods popular with newcomers.
Pavlov says communities favoured by Chinese immigrants in BC’s Lower Mainland saw housing prices decline more than in other neighbourhoods following the termination of the Canadian Immigrant Investment Program in 2014.
UBC Business professor Tsur Somerville collaborated on the study, which he describes as a very small piece of a larger puzzle when it comes to addressing Canada’s real estate challenges.
Somerville says evidence indicates that immigrants who arrive with wealth tend to drive up housing prices, as does foreign investment separate from immigration.
Housing affordability is a hot topic across the Lower Mainland as its notoriously overheated real estate market continues to surge, pushing the average price of a single-detached home in Vancouver to $1.5 million.