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A Brief Comment on a Recent Study about Chinese Real Estate Investment in Vancouver

A case study by Andy Yan, a University of British Columbia adjunct planning professor and analyst, suggests that offshore money, and especially that brought by new Chinese immigrants, plays a significant role in driving Vancouver’s real estate price. According to the study, 66% of 172 unit sales in Vancouver’s Westside from September 2014 to February 2015 went to owners with “non-anglicized Chinese names.” Although the findings appear to support widely held assumptions regarding the negative impact of Chinese real estate investors on Vancouver’s housing market, issues surrounding data sampling, methodology and corresponding results mean that conclusions should be treated with caution.

Firstly, the sample size is small and geographically limited, with the study being conducted in three neighbourhoods on Vancouver’s Westside. As such, the implications for the broader Vancouver area may be similar or dissimilar to what may be occurring within three Vancouver Westside neighbourhoods. It should be especially noted that the three neighbourhoods are all located near the University of British Columbia (the furthest of the neighbourhoods, Dunbar, is a five minute drive from the University), so it is unsurprising that a large proportion of real estate owners are wealthy Chinese parents or their college-aged children.

Secondly, the methodology of this study has the same problem with another study conducted in Auckland, New Zealand, which is cited in a China Institute at the University of Alberta occasional paper by Kerry Sun. Although the Vancouver study uses a full name search to identify potential holders of offshore money instead of just using surnames, it is still a potentially flawed method given the more than two centuries old ethnic Chinese presence in British Columbia. Unfortunately, no available dataset provides direct information on Vancouver home owners’ nationalities and money sources.

Regardless of these issues – which the study author also addresses in his study – it should be noted that, to date, this appears to be one of the first data-based, academic analyses conducted on the potential scope of foreign Chinese real estate investment in Canada. As identified in the aforementioned China Institute occasional paper, more data-based analysis – and as such, more publicly available data – will be needed to contribute to a constructive conversation on the topic.

We would add that, absent proper data collection by government, partial or speculative data collection can also carry the risk of fuelling criticism of Canadians of Chinese ethnic origin. The solution is to collect proper data.

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