The Impact of Immigration on the Housing Market

 

Vancouver-1-1.jpgBy Melanie Reuter

The Vancouver Sun released an article today based on the research of UBC geographer Daniel Hiebert.  Melanie Reuter has shared these findings through her examination of his and other research, with REIN Members for nearly half a decade. Immigration has a large and often very good impact on the housing market.  This impact, however, is dependent on how you are positioned in the market.  

Mr. Hiebert’s research indicated staggering statistics that showed the high level of home ownership amongst recently landed immigrants. By cross-tabulating housing and immigration data from the last census period (2006-2011), he found:

  • Overall home ownership for all residents (versus renting) in Metro Vancouver is 70%
  • 81% of all Chinese (in Metro Van) own homes
  • 53% of all immigrants to Metro Vancouver became home owners, purchasing over 100,000 homes; 50% in Toronto; 23% in Montreal
  • 73% of Chinese immigrants purchased homes
  • 52% of Southeast Asians purchased homes
  • South Koreans purchased 51% of the time
  • 44% of Filipinos immigrants bought homes

Using data from the Real Estate Board of Greater Vancouver it was estimated that from 2006 to 2011, new immigrants purchased 45% of all the homes transacted from West Vancouver to Langley.

Not only the high end markets, but also the lower end markets are being impacted. Daniel Hiebert believes that many of the home purchasers are arriving on Family class visas and are bringing large sums of cash (enough to purchase a home) and/or joining forces with existing members of the family and purchasing together or joining their household.

The earlier research Newcomers to the Housing Market (2010) showed that different visa classes purchased homes at different rates.  After four years, the following groups had purchased homes instead of renting at different rates (by visa class):

Family – 60%
Skilled Worker – 49%
Refugees – 20%

For real estate investors, consider using this information and the impact of different groups of people living in certain areas of town to your advantage. Many people decide to buy homes where they rent and choose to live in areas where others from their home country already reside. Consider that these may be strong areas to buy rental property and that there may be lots of good opportunity for selling homes as part of your exit strategy, as newly-arrived people move into homeownership.

For the full newspaper article, see: http://www.vancouversun.com/business/immigrants+help+drive+metro+vancouver+housing+market+study/11782608/story.html?__lsa=cc06-5233              

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