Saanich is the most popular place for foreign buyers in the Greater Victoria area.
That is according to new provincial statistics aggregated on househuntvictoria.ca, a local blog run by licensed realtor Leo Spalteholz that tracks developments in the Victoria real estate market.
The statistics show that Saanich real estate has the most interest from foreign buyers through 2017. In January 2017, foreign buyers accounted for 17 per cent of all purchases in Saanich. While this percentage share has diminished in recent months, Saanich remains the most preferred destination for foreign buyers. In May 2017, the share was 11 per cent.
Gray Rothnie of Century 21 Queenwood Reality Ltd. is not surprised. Saanich especially the Gordon Head neighbourhood is popular among foreign buyers from Asia for several reasons, he said. They include its relative flatness, the absence of trees, its proximity to the University of Victoria, and its closeness to Mount Douglas and the Pacific Ocean, he said.
Aside from these sociological and geographical features, housing in the Greater Victoria region remains a bargain compared to prices around the world and a safe place for investment, he said.
The influx of foreign buyers purchasing real estate in British Columbia has been the subject of considerable controversy in recent years. Observers have blamed foreign buyers for turning Vancouver into one of the most expensive cities anywhere in the world, and overt racism aimed primarily at people of Chinese background has reared its head across the city.
However, this narrative of foreigners swamping the Vancouver housing market to the detriment of locals relied largely on anecdotal evidence prior to the introduction of a foreign buyers’ tax for Vancouver in July 2016.
Its introduction has since produced a bevy of statistics that show that the percentage share of transactions registered to foreign buyers has ranged from between less than one per cent in August 2016 (the month after the introduction of the tax) to 4.2 per cent in October 2016. The last available statistics show the figure at 3.07 per cent in May 2017.
Victoria’s share of transactions registered to foreign buyers hovered just below five per cent, with peaks of 6.95 per cent in October 2016 and 6.62 per cent in January 2017.
Notably, the trend lines for Vancouver and Victoria show convergence. While purchases by foreign buyers in Victoria rose, as sales in Vancouver dropped following the introduction of the foreign buyers tax, sales in Victoria have remained flat, if not trending down, just as sales in Vancouver have picked up again.
Saanich’s erstwhile popularity among foreign buyers comes as the new provincial government considers various options to curb real estate speculation. They include the possibility of expanding Vancouver’s foreign buyers tax to other municipalities – Victoria had earlier considered then rejected a foreign buyers tax – and measures to curb tax evasion amidst concerns that foreign criminals use real estate in British Columbia as tax havens.
Rothnie warns against a foreign buyers tax in light of existing measures. “I think we already have a very prohibitive property transfer tax,” he said.
Adding another tax would increase that burden, he said.
Pointing to the fact that foreign buyers made up less than five per cent of buyers in Victoria, Rothnie also raised questions about the apparent significance of the problem and warned against cultural resentments aimed at foreign buyers. Individuals coming from elsewhere to Victoria are no different than the individuals who came to Victoria several generations ago, he said. They are looking to build lives for themselves and their children, he said.
Ultimately, high real estate prices across Victoria reflect the forces of supply and demand, he said
“We live at the tip of a very desirable island,” he said.
