The Truth About Metro Vancouver's Immigrant Real Estate Investors

In typical BC Home Hunter Group fashion here is the truth about real estate. This report will touch on just a few lesser known facts that contribue to these headlines, if you would like a more detailed and area specific analysis don't hesitate to call us anytime.

 

Welcome to our no spin zone.

There has been a recent dramatic drop in immigration to B.C. from other countries – which plunged to negative numbers for the first time in 10 years – will not slow the rich flow of wealthy foreigners into Vancouver real estate, analysts say.

In the fourth quarter of 2014, immigration to B.C. was negative 3,145 people after a net increase of 18,753 in the previous quarter and an average of 34,000 annually for the past decade.

“It’s all about the temporary foreign workers (TFWs) leaving Canada,” said Richard Kurland, a Vancouver immigration lawyer.

But an exclusive study of national data shows that hundreds of wealthy foreigners are using a backdoor to B.C. without showing up on immigration numbers.

The Conservative government set April 1, 2015 as the deadline for the temporary low-skilled workers to leave the country after changing the rules in 2011. Formerly, TFWs had only to re-apply, but new rules require them to leave the country for at least four years before re-applying.

The exodus from B.C. has begun.

“There are also no new temporary workers coming in”, Kurland noted.

In all, 6,900 of these “non-permanent residents” left B.C. in the last three months of 2014 and even more will likely leave in the first and second quarters of this year, said the partner of Kurland, Tobe.

There are an estimated 70,000 TFWs in B.C., third highest among provinces.

A 90-day provincial moratorium on applications under B.C.’s revised Provincial Nominee Program, that began March 31, will also choke the flow of middle-class immigrants.

“We will see less new immigrants this year [because of the PNP pause]” said Queenie Choo, CEO of SUCCESS, a non-profit immigrant settlement agency in Vancouver.
NET IMMIGRATION TO B.C., 2014
First Quarter: 8,691
Second Quarter: 9,561
Third Quarter: 18,753
Fourth Quarter: -3,145
Source: BC Stats

But Kurland said any loss of lower-skilled workers from B.C. is taken up with the “trampolining” of rich immigrants from Quebec. It is easier for immigrant investors to qualify for Canadian citizenship through Quebec's Immigrant Investor Programme, which has become more widely used since the death of a similar federal program last year.

Quebec plans to bring in 5,000 investor immigrants this year, a record amount.

Such investors loan the Quebec government $800,000 interest-free for five years and in return receive permanent resident visas for their family. The immigrant investor states they will reside in Quebec, but nearly all promptly relocate to B.C.

Kurland’s office paid for study that tracked the addresses of 5,120 Quebec immigrant investors who had arrived from 2000 to 2008. The study found that, within months of landing in Quebec, 91% of them had a B.C. address and most were living in the Vancouver area.

“That is literally 2,000 wealthy immigrants a year moving in –150 a month – who are not counted in B.C. immigration numbers,” Kurland said. “Can you imagine what 2,000 millionaires means to the high-end property market in Vancouver, as buyers?”

The scale of the influx is rich by any measure.

From 2005 to 2012, about 45,000 millionaire migrants arrived in Vancouver through the federal and Quebec immigrant investor schemes. To put this in perspective, the entire United States accepted less than 9,500 wealthy immigrants in the same period under its EB-5 immigrant investor program, representing less than 30,000 people.

The mayor of Vancouver has been doing his best to play both sides of the "conversation" however he and many lower mainland politicians will bow to their consituents feelings so don't rely on that source unless your one of those that will benefit from such diatribe.

Those suggesting another tax and spend policy or simple taxing, spending and punishing both homeowners and businessess. After all can you imagine having the hard fought equity in your house or condo devalued in the name of redistribution? With record low interest rates and a very sound economic future, British Columbia is looking good. 

Sadly, the lower mainland and west coast has always suffered from "what have you done for me lately" syndrome. The have not's screaming for their entightled share, rights and redistribution of wealth even at the detrement of seniors who finally have earned significant equity in the homes they worked hard and sacrificed to pay for, often with unbearably high interest rates for decades.

If you or anyone you know is considering the purchase or sale of any real estate anywhere in Metro Vancouver, the Fraser Valley or British Columbia don't hesitate to call or email our team at BCHH, 604-767-6736.

(Credit BIV)