BTAworks slideshow on the topic of Foreign Investment in Vancouver Real Estate presented at SFU Woodwards on March 20, 2013

1. Foreign Investment in Vancouver’s
Real Estate Market
SFU Woodwards
Andrew Yan
March 2013

2. Lions Gate Bridge
A.R. Guinness-
Foreign Investment in British Pacific
Vancouver Real Estate: Properties,1937
A Historical Case Study
• $95 million (in 2012 dollars)
• Investment from a large
multinational conglomerate
• Opened up a massive
portion of Metro Vancouver
for very high-end exclusive
residential development
Image Source: Wikipedia

3. What is “Foreign Investment”?

4. BTAworks
www.btaworks.com

5. Data Sources
1. BC Assessment
– Ownership data
BC Assessment
2. Home Owner Grant
– Confirms BC Assessment Data
Home Owner BC Hydro
Grant
3. BC Hydro
– Provides a measure of “empty
condos”
4. Qualitative Review
– Confirms the rental rates and
Qualitative Strata Minutes liveability issues of condo buildings
and Regulations Review
5. Existing CMHC, Stats Can, and
CoV Data and Research
Any data was consolidated and anonoymized
to respect confidentiality and privacy
Existing Canada Mortgage Housing Corporation,
Statistics Canada, and City of Vancouver
Data and Research

6. Defining Downtown Vancouver
West End
Downtown
Strathcona
Kitsilano
Fairview
Mount Pleasant
Data Source: Local Areas, City of Vancouver Open Data Catalogue

7. Study Building Locations
Data Source: Local Areas, City of Vancouver Open Data Catalogue

8. A Foundational Research Assumption
• If a property assessment address
was matched where the
assessment was received, then a
unit is commonly understood as
Investor
owner occupied
Owner
Owned Occupied • If an assessment address did not
51% 49%
match where the assessment was
received, then a unit is investor
owned
n=2,387
Data Source: 2008 BC Assessment

9. Finding “Foreign” – Method 1a – Where Assessment Tickets are Sent
100.0%
Canada, 93.8%
90.0%
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0% China, Japan, Hong Kong, United
USA, 3.8% Rest of the World,
0.6% 0.3% 0.2% Kingdom, 0.2% 1.1%
0.0%
%
n=2,386
Data Source: 2008 BC Assessment, BTAworks Empty Condo Study Sample Re-analysis

10. Finding “Foreign” – Method 1b – Where Investor Owned Assessments
are sent in the Metro Vancouver Region and Beyond
Investor Owned Mailing Address
West
Vancouver
North
6%
Vancouver
6%
25% Go
Outside
Burnaby Metro
6%
Vancouver
42% Vancouver
Surrey
3% 1% of IOAs
1% of IOAs
n=1,205
Data Source: 2008 BC Assessment, BTAworks Empty Condo Study Sample Re-analysis

11. Finding “Foreign” – Method 2 - Ownership Types
Owner Occupied Investor Owned - Individual
Investor Owned - Management Firm Investor Owned - Firm/Strata
6%
2%
49%
43%
n=2,386
Data Source: 2008 BC Assessment, , BTAworks Empty Condo Study Sample Re-analysis

12. Is the Issue
Foreign Investment in
Vancouver Real Estate?
or
Investment in Vancouver
Real Estate?

13. How Many Units were Investor Owned vs. Owner Occupied?
Investor Owned Owner Occupied
52-61% 39-48%
Data Differences between
BC Assessment and
Home Owners Grant
n=2,186
Data Source: 2008 BC Assessment and BC Home Owners Grant Database

14. Key Findings from BC Assessment
Investor Owner
Owned Occupied
51% 49%
n=2,387
Data Source: 2008 BC Assessment

15. An Affirmation - 2009 Percentage of Investor Owned vs. Owner Occupied Units
by Sub Area
100%
90% 18% 19%
27% 23%
35%
80% 40%
48%
70%
60%
50%
40% 82% 81%
73% 77%
65%
30% 60%
52%
20%
10%
0%
Downtown West End Fairview/Kits West Side East Side Mt. Pleasant/NE Vancouver Total
Owner Occupied Investor Owned
n=66,112
Data Source: Reconstructed from CitySpaces Consulting with Urban
Futures Inc, Vancouver Condominium Rental Study, 2009

16. Key Findings from Home Owner Grant Database
• To qualify for a Home Owner
Grant, the unit must be an
owner’s principal residence
• the homeowner must be a
Receiving Canadian citizen or landed
HOG
39%
immigrant
Not Receiving
HOG • HOWEVER, units must be
61% valued at less than $1.164m in
2008
n=2,186
Data Source: 2008 City of Vancouver Home Owners Grant Database

17. A Comparison Between BC Assessment and Home Owner Grant
Databases – Why the Difference?
2008 BC Assessment Home Owner Grant Database
Investor
Owned
52%
n=2,186
? 10%
Data Source: 2008 BC Assessment and Homeowners’ Grant Database

18. Does Size Matter?
• Smaller units are often cited as a
means to facilitate for first time
home ownership
• For units under 425 square feet
> 110 units over 4 buildings
> Median Assessed Value of
$261,000 Investor
Owned Owner
> Built between 1995 to 2006 62% Occupied
> All were studios 38%
n=110
Data Source: 2008 BC Assessment

19. Finding “Foreign” – Method 3 – Empty Condos
• Upon consultation with BC Hydro, an
empty unit that uses less than 75 Kw/h a
month
> the amount of electricity that an average
new refrigerator uses to maintain itself in
one month
> An average unit used 400 Kw/h a
month
• HOWEVER, there are a number of
possible reasons towards why a unit used
less than 75 Kw/h
> Moving
> In-between owners or tenants (Churn)
> Seasonal occupants
> Investment Holdings
> Based upon BC Hydro monthly accounts from
Jan 2006 to Dec 2007

20. Empty Condo in Downtown Vancouver Estimates
75 kw/h 100 kw/h 150 kw/h
(BC Hydro Suggested
Threshold)
8.5% of units 17% of units
5.5% of units were possibly were possibly
were possibly empty empty
empty
8 to 9 percent of Downtown condo units
June 2004 estimate by the City of Vancouver
1,100 Kw/h a year(~90 kw/h per month) threshold
Data Source: BC Hydro (Fortis)

21. New Census 2011 Based Research

22. What is a Non-Resident Private Regular Dwelling Unit?
Dwellings
Collective Private
Unoccupied Occupied
Occupied (not published Regular
data)
Marginal
Occupied solely Occupied solely Occupied solely
Occupied by by foreign Occupied by by foreign by foreign
Occupied by
Usual residents and/or usual residents and/or Unoccupied residents and/or
by temporarily usual residents
Residents resident by temporarily by temporarily
present persons present persons present persons
Data Source: Dwelling Universe, Statistics Canada, 2011 Census of Population Census Dictionary

23. Largest 25 Canadian Cities by Percentage of Non-Resident Occupied
Regular Dwelling Units
9.0%
8.6%
7.7%
6.9% 6.8% 6.8%
6.6%
5.5% 5.4%
5.0% 5.0% 5.0% 5.1% - Average
4.6% 4.5%
4.3% 4.3% 4.2% 4.2%
4.1%
3.6% 3.5%
3.3% 3.2%
2.9%
2.5%
Data Source: Statistics Canada, 2011 Census of Population

24. Geography of Non-Resident Occupancy Dwellings – City of Vancouver
Non-Resident Occupancy is defined as a
regular private dwelling unit that is either
"unoccupied" or "occupied solely by foreign
residents and/or temporary present residents"
on the Census reference day - May 10, 2011
Data Source: Statistics Canada, 2011 Census of Population

25. Geography of Non-Resident Occupancy Dwellings – Downtown Vancouver Core
Context
Reported Oct 2010 CMHC Total Vacancy
Rate for Downtown Vancouver
1.3%
Non-Resident Occupancy is defined as a
regular private dwelling unit that is either
"unoccupied" or "occupied solely by foreign
residents and/or temporary present residents"
on the Census reference day - May 10, 2011
Data Source: Statistics Canada, 2011 Census of Population

26. Estimating the Amount of “Empty Condos” using a 2011 Census Methodology
Context
Reported Oct 2010 CMHC Total Vacancy
Rate for Downtown Vancouver
1.3%
Non-Resident Occupancy is defined as a
regular private dwelling unit that is either
"unoccupied" or "occupied solely by foreign 14.9%
residents and/or temporary present residents"
on the Census reference day - May 10, 2011
or 5,710 units
Data Source: Statistics Canada, 2011 Census of Population

27. Map Source: Vancouver Economic Commission, September 2011,The Vancouver
Economic Action Strategy: An Economic Development Plan for the City