Who is driving up real estate prices? Foreign buyer market participation rate drops near zero in 2020

Who is driving up real estate prices? Foreign buyer market participation rate drops near zero in 2020

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March 15, 2021

Affordability problems, skyrocketing housing prices, and the most expensive city to live in the world were some of the labels attributed to Vancouver. Foreign buyers were always the first group of people that takes the blame. Without doubt that foreign buyers partially contributed to the raising housing prices, but to what degree?

2016 was when the Liberal government imposed a foreign buyer tax. Since then, the volume and price of properties steadily declined. The policy was a negative signal for real estate market. Therefore, the decline was reasonable and extremely effective when foreign buyer was the hottest topic at the time.

BC Real Estate Association released 2020 real estate data showing share of foreign buyer in the fair market value of homes was 0.56%. Foreign buyer accounted for 1.4 percent of homes sold. By the end of 2020 and early 2021, the housing market rebounds significantly. The price of a typical home rose to $1,084,000 in February. A 33.8% increase compared to the same month in 2016. Bidding wars were happening everywhere, and the market will likely get hotter.

BCREA economist believes the price adjustment is rational. Low interest rate, undersupplied market, and proven resilient economy amid the pandemic. However, we believe the three factors has existed long before the boom happened in December.

If we look back, foreign buyers accounted for

  • 2017: 3% market share, 3.97% home value
  • 2018: 2.4% market share, 3.16 home value
  • 2019: 1.7% market share, 0.86 home value

The annual average home price increased to $782,027 in 2020, 11.7% more than the previous year. The data speaks. It is not just foreign capital that is causing housing boom. It has more to do with Vancouver’s potential to grow in the long run. A strong demand sees investment potential in the housing market. As OCP and transit options continues to grow, investing in this city will net a great return. If foreign buyers were not the main culprit then it is the residents in the city is playing its role.

“The non-economists claim foreigners are to blame. The economists claim we Canadians are to blame,” according to Sullivan, former Vancouver Mayor.

“Just last month Stats Canada researchers and Government of Canada housing economists finally released their report. They found 3.2 percent of all single detached homes in Metro Vancouver were owned by nonresidents. This includes Americans and British Columbian snowbirds who live south of the border most of the year,” Sullivan added.

"The trouble is that we kind of always try and find whats the one thing that’s driving the market when in fact it’s generally a whole bunch of different factors that are all happening at once or kind of reinforcing each other,” Ogmundson said, chief economist with the B.C Real Estate Association in an interview with the Georgia Straight.

“We have a thriving pan-Asian population for a long time, but even people who have been of second-, third-generation are still sort of seen as foreign because of their names or something silly like that,” Ogmundson said at the time.

Yoyoe Lu

Founder and managing principal

Yoyoe is the founder and managing principal of Claridge. She was ranked one of Vancouver’s top real estate agents. Currently, Yoyoe is our strategic mind leading the team to success. Her affiliation with industry professionals put her ahead of our competitors. Yoyoe is also part of the Rotary Club of West Vancouver, Canadian Homebuilders Association, Urban Land Institute and Urban Development Institute.

Ashley Osborn

Development Site and Investment Specialist

Ashely is our lead land and investment advisor. He has been consistently featured in the annual top 100 real estate deals of British Columbia ranking. With over $15 billion worth of domestic and international real estate investments under his belt, Ashley is one of the top agents in the province. His 20 years of real estate and financial experience make him a master in negotiation and acquisition.

Patricia Wong Chong

Investment and Leasing Specialist

Patricia is our investment and retail leasing advisor. Her experience in brokerage and market research analysis has helped her comprise over $550 million in commercial real estate transactions. Patricia is responsible, detail-oriented, and professional. Her strong work ethic and positive attitude have led her to surpass all her competitors.

Schumann Li

Land Assembly & Residential Specialist

Schumann is a top-producing realtor in the Lower Mainland with more than 30 years’ experience. Over the years, Schumann hasn’t just garnered awards, but the trust of countless customers. Her clients continually refer to her outstanding professionalism, work ethic and poise.

Wendy Kaip

Sales Associate

Whether it’s decoding city policies, strategizing relocation plans, home sellers looking for a trustworthy advisor to unlock their property’s maximum potential- Wendy is here to help every step along the way.

Prior to real estate, Wendy spent over a decade in the mining industry with her attention to detail, keen negotiation skills, extensive network and strong reputation for getting the deal done, bringing endless value to her current real estate clients.

Whether you are thinking about selling to a developer, or have more questions about commercial real estate, Wendy invites you to connect, to see how she can utilize her expertise and team to help create value and maximize your real estate goals.

Simon Chan

Managing Broker

Simon is the managing broker of Claridge Real Estate Advisors Inc. His expertise has helped our agents resolve many difficulties. Not only is Simon knowledgeable with real estate legislation, but he is also very detail orientated. With Simon on our team, our agents are confident to conduct businesses and will always get the support they need to ensure they’re not walking on dirty water.

Frank Zhou


As the analyst of the company, my key job is to help brokers to find marketable clients and locate feasible development sites by collecting and analyzing up-to-date market transaction data and conducting target market and property-level research. Meanwhile, I am also in charge of maintaining the company’s property database to ensure accuracy and comprehensiveness and continuously upgrading the level of knowledge by staying up to date with hot topics, and market trends, and incorporating findings into everyday work. Before joining the company, I worked for CR Group as a real estate investment manager, focusing on capital raising, equity and debt financing, acquisition and renovation. I hold 2 master’s degrees, one in Housing Management and the other in Economics.