Vancouver was the star of a recent New Yorker article that shone a light on the city’s lack of housing affordability and linked this lack to an inflow of foreign buyers. Unfortunately, this link is extremely tenuous, as most of the support is anecdotal or based on very limited data. At the same time, there are good reasons to look for the sources of the lack of affordability much closer to home. Articles like that in the New Yorker allow for far-flung conclusions that end up bolstering a fatalist political narrative about the potential for meaningful change.
First, the data. The New Yorker author, James Surowiecki, offers two major sources to back his claims. The first is a Sotheby’s report stating that 40% of buyers of Vancouver luxury homes (luxury homes had an average low cut-off price of $2.8 million or three times the overall average price) in the first half of 2013 were foreign. At the end of his article, Surowiecki also cites Andy Yan’s interesting energy usage studies, the most recent of which showed that somewhere between five and ten percent of the city’s condos may be sitting empty at any given time. Of course Surowiecki cited the sensational statistic that almost a quarter of homes in one Coal Harbour census tract were likely vacant at census time. (more…)