Students have poured almost $60 million into real estate in one of Vancouver's most expensive neighbourhoods, the area's MLA said Wednesday.
A total of $57.1 million worth of housing in ritzy Point Grey was bought by people who marked down their occupation as students, according to a study of nine land title documents by B.C. NDP housing critic David Eby.
The least expensive home was $1.85 million, while the priciest came in at $31.1 million.
That one is located on Belmont Avenue, home to some of the city's most valuable properties.
A student was also the buyer of a home for $7.19 million, which then sold just over a year later for $8.35 million.
B.C. NDP MLA David Eby has been looking into real estate transactions in Vancouver. (Photo: John Lehmann/Globe and Mail via CP)
But what really stuck out for Eby was that $40 million worth of the purchases were supported by mortgages from three Canadian banks: the Bank of Montreal (BMO), CIBC or HSBC.
And the provincial government isn't paying the issue nearly the attention it should be, he said at a Wednesday news conference.
"The main issue here today, in my mind, is that when you have students buying tens of millions of dollars worth of property and flipping homes, that should be a red flag," he said.
"And especially when you see mortgages on the property, that should be a red flag for how do these students qualify for mortgages, where did the money come from, how is it that they're playing such a large part in the real estate market in Vancouver?"
A student owns this $31.1 million house at 4833 Belmont Ave., a street that is home to some of Vancouver's most valuable properties. (Photo courtesy David Eby)
Eby's analysis flowed out of a 2015 study he carried out with Andy Yan, an urban planner and acting director of Simon Fraser University's City program.
That study looked at 172 home sales in three Vancouver neighbourhoods on the west side over a six-month period.
It found that 66 per cent of the homes were purchased by people with non-anglicized Chinese surnames, which suggested to Yan that they were recent arrivals to Canada.
Andy Yan, urban planner and acting director of the City program at Simon Fraser University.
The top occupation among all buyers was listed as "homemaker" or "housewife" on land title documents; businessperson was second; and students accounted for eight properties in that study.
Vancouver Mayor Gregor Robertson responded to it by saying, "What we don't need ... is the blaming of any one group of people — or any one kind of last name — for the challenge of housing affordability."
But Eby expanded on that work by looking at the student-owned properties in that study. And now he wonders about the lending practices of Canadian banks.
Lending practices questioned
Canadians have to do a number of things to qualify for a mortgage, such as proving their income. So Eby questions how homemakers and students, who traditionally don't have any income, are qualifying for $40 million worth of mortgages.
"We should see a lot of pressure from our provincial government on the feds to fix this rule so that at least British Columbians have the same access to mortgage financing that everybody else does," he said.
"It shouldn’t be that you work at a disadvantage because you live, work and pay taxes in Metro Vancouver.”
This home at 4200 8th Ave. in Vancouver was bought by a student for $7.19 million. It was sold just over a year later for $8.35 million. (Photo courtesy David Eby)
Jean-Yves Duclos, the federal minister who oversees housing, said this week that the government is looking into concerns by Canada's financial regulator that income verification has been subpar for non-Canadians, The Globe and Mail reported.
"We are clearly concerned by the fact that there may be ways in which Canadians are not being treated equally in having access to the housing market," he said.
Meanwhile, provincial and municipal governments have implemented a number of measures to boost housing affordability in Vancouver.
B.C., for one, implemented a property transfer tax of 15 per cent on homes purchased by foreign buyers, which came into effect on Aug. 2.
Sales have since plummeted, but they were already falling for months before that, so it's difficult to determine the influence it's having on the market.
The City of Vancouver, meanwhile, is looking to introduce a tax of two per cent on the assessed value of homes that are left empty, in an effort to make more rental housing available.