Immigrants have a major impact on fast-rising house prices in Metro Vancouver and Toronto, according to the author of a new study.
In a unique research project, UBC geographer Daniel Hiebert discovered that ethnic Chinese and South Asians become homeowners at a much higher rate than other immigrants and the general population.
“There is definitely an impact on the housing market,” said Hiebert, who believes a key factor behind the phenomenon is many new immigrants arrive in Canada’s major cities with a great deal of money.
The veteran researcher’s exclusive cross-tabulation of housing and immigration data, including between 2006 and 2011, found on average that 53 per cent of immigrants to Metro Vancouver during those five years became homeowners in that period.
They bought roughly 100,000 homes in Metro Vancouver during the five years, ranging from suburban condos to ritzy mansions.
“New Chinese immigrants were at the top of all this. Kind of incredibly, their rate of home ownership was 73 per cent,” said Hiebert.
Roughly 52 per cent of newly arrived South Asians, the second largest immigrant group in Metro Vancouver, bought homes in that same five-year period.
Rounding out the five largest recent newcomer groups during that period, the rate of home buying among South Koreans was 51 per cent and among white and Filipino immigrants it was each about 44 per cent.
Hiebert, who has published major studies on immigration, housing and ethnic enclaves, believes immigrants are seriously affecting housing affordability at both the high and low ends of the market.
Prices of Metro Vancouver’s expensive properties, those in the $4-million-plus range, are being dramatically affected by immigrants, Hiebert said. But, at the low end, so are costs for new Syrian refugee families, who need government subsidies to afford a basic place to live.
While some of the new immigrants who end up classified as homeowners might be among the relatively few who arrive on a family reunification program and join an existing household, Hiebert believes most would be buying homes by transferring large financial resources into Canada.
“I think it would be a pretty big stretch for someone to arrive tabula rasa (without a lot of money) in a housing market like Vancouver and within five years be able to purchase a home in this place. That would be really difficult to expect.”
Hiebert’s findings support the conclusions of UBC’s David Ley, holder of the Canada Research Chair in geography and author of Millionaire Migrants. The Oxford-educated professor has found an “unusually decisive” correlation between high immigration to Metro Vancouver and high home prices.
The overall rate of home ownership among all residents in Metro Vancouver is almost 70 per cent — out of a total 1.5 million households, according to Hiebert’s work.
Based solely on visible-minority status, and disregarding immigrant status, ethnic “Chinese have the highest ratio of home ownership, followed by South Asians,” Hiebert said.
“The percentage of home ownership among Chinese is 81 per cent,” accounting for 290,000 Metro households, Hiebert said.
“And South Asians are second at 75 per cent,” or roughly 160,000 households.