Union city downtown Markham.House prices in Toronto soared. The soaring house prices in Vancouver and Toronto have always been a mystery to many people.Please Visit: Union city downtown Markham to Get Your VVIP Registration Today!
Some blame it on foreign buyers, others on low bank interest rates, and others on the decline in Canadian manufacturing and resources industries. However, the above arguments are lack of reliable data and are not convincing.
Recently, the data disclosed by the Canadian media globe news have opened a new hole in the mystery of soaring house prices in Vancouver and Toronto. The figures show that the surge in house prices in Vancouver and Toronto is not due to low interest rates by foreign buyers and banks, nor to the decline in manufacturing and resources industries, but to Quebec’s Quebec Immigrant Investor Program, or QIIP).
The Quebec QIIP program was implemented in 1986 to attract foreign investment. Under the plan, international businessmen with assets of more than C $1.6 million can obtain permanent residency in Quebec by providing an interest-free investment of C $800000 to Quebec, and the funds will be recovered five years later. According to the agreement, investors who are granted permanent residency must reside in Quebec.
However, according to data obtained by globe news, as of 2016, most of the 57935 Quebec investment immigrants who entered Canada under the QIIP program did not live in Quebec, but flocked to Vancouver and Toronto respectively. Of these, 27080 people flocked to the Vancouver area, accounting for 46.7%; 19265 people flocked to the Toronto area, accounting for 33.3%; and only 6050 people remained in Quebec, accounting for 10.4%. It can be seen that nearly 90% of Quebec’s investment immigrants to Canada have moved to Vancouver and Toronto.
Mr. he, from Hebei, China, said that QIIP immigrants live in Toronto or Vancouver and can meet their daily needs in simple English, while Mr. Zheng, an QIIP immigrant from Shanghai, China, said that most investment immigrants move to Toronto or Vancouver because they have friends there and it is easier to return to China. In addition, many people don’t like the weather in Quebec.
Giovanni Gallipoli, an economist at UBC, calculated the impact of Quebec investment immigrants on Vancouver real estate. In 2017, the average real estate price in Vancouver was $990000, with monthly sales of 3000 units. By 2016, 15285 investment immigrant families had entered the Vancouver area through the QIIP program. Based on this, they spent an average of $36 billion a year in the Vancouver real estate market. Assuming that each family spends $1.6 million on real estate (the benchmark price for detached houses in December 2017), they invest $24 billion in the Vancouver-area real estate market.
“even if only a small portion of the money is spent on buying a house every year, it will have an unnegligible impact on house prices and housing stock.” Giovanni Gallipoli said.
One of the manifestations of the impact of QIIP immigration on the Vancouver real estate market is that it has pushed up houses of all grades in turn. “the money goes to high-end communities, which means that people who could have bought houses in these communities can no longer afford it.” they “bring more purchasing power to second-tier neighborhoods, driving people who used to buy houses farther away, and so on.” Giovanni Gallipoli believes that the Quebec QIIP program has led to unaffordable housing prices in Vancouver and Toronto.