Canada's former ambassador to China, David Mulroney, has delved into the debate around foreign ownership in Vancouver's real estate market and how it affects affordability in his new book, Middle Power, Middle Kingdom.
"Mainland Chinese buyers are really driving markets from Sydney through New York to London, and Canadian cities like Vancouver — particularly Vancouver — are no exception," Mulroney, who served as Canada's ambassador to China from 2009 to 2012, told The Early Edition's Rick Cluff.
He said it's difficult to track the actual number of foreign owners — and their impact on the housing market — but he believes it has been huge force in the lack of affordable housing in Vancouver.
"Is it having an impact on price? I know there's a lively debate in Vancouver about that. I'm on the side of those who think it is having an impact on price, but that debate should continue," he said.
Mulroney said other cities around the world have policies to account for foreign ownership, and said Vancouver should follow their lead.
"Really smart policy makers are thinking about ways to deal with this in ways that keep their cities welcoming — and, gosh, we want that above all — but also protect people on fixed incomes or think thoughtfully about vacancies," he said.
Mulroney gives the example of Australia, where foreign investors have to register, and owners aren't allowed to buy existing housing, with the idea that they should contribute to growing the country's housing supply.
He said other jurisdictions levy taxes against foreign ownership, like in the U.K., where foreign owners have to pay an additional tax when using overseas assets to make the purchase.
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Mulroney's book doesn't just address real estate — it looks at the rising class of wealthy individuals, and how Canada's policies aren't keeping up.
"The very wealthiest people in China are increasingly kind of voting with their feet about the future of China. They're retaining a stake in China, but they're also looking to have a stake somewhere else in the world should conditions require them to move," he said.
He said Canada needs to focus on policies to help it benefit from people who invest in Canada.
"My overall point is that we're not responding to it in a way that is as creative and thoughtful and connected as it should be."
Mulroney is speaking about the book at U.B.C. in Vancouver on Tuesday, March 31.
To hear the full interview with David Mulroney, click the audio labelled: David Mulroney, former ambassador to China, calls for new rules on foreign ownership.