Foreign buyers spent more than $885 million on Metro Vancouver real estate in just five weeks, according to new data released by the B.C. government on Tuesday.
The money represents about 10 per cent of the value of all real estate purchased in the region over that span, the government said.
The data — which included all properties registered between June 10 and July 14 — revealed that within Metro Vancouver, the cities of Burnaby and Richmond had the highest number of foreign buyers at 18 per cent.
Eleven per cent of the real estate transactions in the City of Vancouver involved foreign buyers.
According to the government's data, foreign buyers favoured the Metro Vancouver region, which accounted for 73 per cent of all their purchases.
In comparison, the Victoria-Capital region housing market only had 3.5 per cent of its real estate transactions attributed to foreign buyers.
The government did not release data about the buyers' specific countries of origin.
Foreign buyers responsible for overheated market?
Many critics have speculated that foreign capital coming into Vancouver is one reason real estate has become increasingly unaffordable, with locals unable to compete with foreign investors.
B.C. Finance Minister Mike de Jong said he felt demand from foreign nationals is contributing to escalating house prices. He said the government is taking steps to reduce the demand and increase the domestic supply.
Yesterday, it announced a new 15 per cent property transfer tax on foreign buyers, but only within the Metro Vancouver region.
The proposed legislation would have anyone who is not a Canadian citizen or permanent resident pay a 15 per cent tax when they register their property.
The change is scheduled to take effect August 2, with room for the provincial government to increase the tax to 20 per cent or decrease it to 10 per cent as it sees fit.
De Jong said if the current rate of foreign nationals purchasing property continues, "it's going to generate a lot of money," which the provincial government has promised to invest in creating housing as well as rental and support programs.
De Jong defends 15% foreign tax
De Jong also addressed criticisms of the foreign tax.
He acknowledged that the one-week turnaround is quick but said that purchases already scheduled to take place after the tax comes into effect will not be "grandfathered" and exempted from the tax. He said the tax will be uniformly applied to any property registered on and after August 2, as is typical of tax legislation.
De Jong said because the tax applies on properties registered on and after August 2, it will, for example, capture anyone that has purchased condos during pre-sales.
As for criticisms that the tax will penalize non-citizens and non-permanent residents who work and contribute to the Canadian economy, while potentially benefiting permanent residents and citizens who don't even live in the country, de Jong said the provincial government cannot dictate immigration policy.
"Immigration, constitutionally, remains a federal responsibility," he said.
When pressed further, specifically about the Quebec immigrant investor program which some argue channels millionaire investors into B.C., de Jong claimed fears were overblown.
"This is taking on a bit of a conspiratorial nature," he said. "It's not like vast boatloads of people are landing in Montreal with a Vancouver ticket."
The bill is expected to be put to a vote on Thursday.