Mystery Money

Property speculation in Vancouver reportedly has a new meaning these days. According to The Economist, it’s “wondering what exactly is driving up prices in the least affordable housing market in North America”. Is the market being fuelled by foreigners? That remains a baffling “mystery” we’re told in the full report. There just “isn’t information” available. No data is kept on foreign investment activity in the city, explains The Economist, echoing the rhetoric of Vancouver’s “condo king” Bob Rennie.

Analyst studies aimed at uncovering patterns, trends that might offer clues, have reportedly included monitoring electricity bills, tracking property assessment mailings, and counting “mainland Chinese-sounding names” on sales records. It’s all a big waste of time according to urban planner Andy Yan, who likens any effort to measure the impact of foreign money on prices to “searching for the Higgs particle”. Says Yan: “Everyone knows it’s there, but it’s proving it that’s the problem. We know it’s not wage growth; and it isn’t the economy here. All we know is that in Vancouver, real estate has been de-coupled from the local economy.”

Economist Benjamin Tal recently called the lack of publicly available information about Canada’s housing market “mind-boggling”. The Globe and Mail reports this morning that in response to demand, the Canada Mortgage and Housing Corporation (CMHC) is now looking to fill research gaps on the Canadian housing market. While foreign investment activity is cited as a possible research gap, we’re reminded in the report that a statistical grasp on foreign money is “challenging”. Meanwhile, CMHC is still “trying to find the biggest gaps and the highest priority areas to focus on,” says CEO Evan Siddall. We won’t hold our breath.

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