When Canada issued a two-year ban on foreign buyers on January 1 this year as part of a suite of government measures designed to make housing “more affordable for Canadians”, Vancouver ranked as the country’s most unaffordable city. Homes should be “lived in”, not used as “commodities”, said housing minister Ahmed Hussen before the ban came into being.

Yet, in October, the typical price for a home in Greater Vancouver was C$1,196,500 — up 4.4 per cent in the past year, according to the Canadian Real Estate Association’s Multiple Listing Service (MLS), though down a little on recent months. Thanks to rising mortgage rates, the minimum income required to buy an average-priced home in the city has increased to nearly C$250,000 (about $182,000), according to online broker Ratehub.ca.

“Affordability and the lack of supply of new homes are the biggest issues with Vancouver,” says Kevin Skipworth, managing broker at Dexter Realty. “While we now have more inventory [since September], it’s still far short of what’s needed.” He says that rising interest rates are forcing many would-be sellers to stay put. “They are resistant to jump into the market to buy when they are currently sitting with a lower interest rate on their current home.”

Sales in Metro Vancouver in October 2023 (1,996) were marginally higher than a year ago (1,924), but 30 per cent lower than before the pandemic in October 2019 (2,858).

Clamping down on foreign investors may be missing the point. “Evidence suggests that British Columbia’s foreign buyer tax led to lower prices on expensive single-family homes but had little impact elsewhere,” says Thomas Davidoff, director of the Centre for Urban Economics and Real Estate at the University of British Columbia. “The use of the property is more important than the nationality of the owner. A foreign landlord who rents their unit provides housing for someone local. A domestic vacation homeowner does not.”

Foreign buyers, in fact, make up only a small proportion of Vancouver’s property market. According to Skipworth, the introduction of a regional 15 per cent foreign buyer tax in 2016, which was increased to 20 per cent in 2018, “fundamentally removed foreign buyers from our market”. In 2016, non-Canadian buyers were involved in 6.6 per cent of sales in British Columbia — “it was one of the most active markets we’ve seen,” recalls Skipworth, with high numbers for all categories. In 2022, only 1 per cent of buyers in the province were from overseas (though Canada’s delayed return to global travel after a long Covid hiatus will have played a part in this).

Add to that the City of Vancouver’s 3 per cent empty homes tax, the province’s 2 per cent speculation and vacancy tax, and the newly introduced 1 per cent underused home tax. “All three deter buyers from abroad,” says Skipworth.

Although buying a home has been stymied, Vancouver continues to attract a wide range of newcomers from abroad. International immigration added 53,313 to British Columbia’s population in the second quarter of 2023, an increase of nearly 41 per cent on the same period in 2022.

Among the city’s many draws is the dramatic wilderness on its doorstep. “I couldn’t believe my eyes when first seeing the snow-capped mountains just a few kilometres from downtown and the beautiful body of water that led up to them,” says Charlie Bell, 28, a manager for Deloitte who is also a keen skier and sailor. Toronto-born Bell, who moved from Melbourne to Vancouver in September 2021, rents in Mount Pleasant, “a 30-minute walk from downtown and 15 minutes by bike to the beach”.

For those newcomers who want to buy, the “foreign buyers ban”, as the less catchy Prohibition on the Purchase of Residential Property by Non-Canadians Act is commonly known, is not as black and white as its name suggests. In particular, in March, new exemptions were added, including for foreigners who hold a work permit; those buying vacant land for development; and those buying country cottages or purchases in a municipality with fewer than 10,000 inhabitants.

“Most people have too simplistic a view of the foreign buyers ban and think it means there can’t be any foreign buyers,” says Jonathan Cooper, president at Macdonald Realty, who suggests prospective buyers consult a lawyer about the nuances of the act. There are also online tools to help people work out whether they can buy in certain areas, such as an interactive map provided by the Canada Mortgage and Housing Corporation.

“I wouldn’t say we have seen buyers find ways around it,” says Skipworth, “but there have been instances where it has been unclear and we’ve asked them to get a legal opinion.”

“Quite restrictive” is how real estate lawyer Richard Burgos, partner at Bennett Jones, describes the legislation. “All indications are that the act and its regulations will be liberally interpreted by the applicable authority in order to curtail non-resident purchases.” He adds, though, that he has seen “very few nonCanadians seeking to buy property” since the act was introduced.

Faith Wilson, who runs an affiliate agency of Christie’s International Real Estate, says buyers from the US and Australia have been turned away. “If they are coming here to settle with family and wish to purchase in West Vancouver, for example, because of its good schools, they are being stymied by this ban,” she says.

There have been enough Canadian buyers, though, to keep prices for highend homes rising. In the past year, prime prices in the city have increase 4.9 per cent, according to estate agent Knight Frank. In the city’s Westside — which is among the most sought-after areas for buyers with multimilliondollar budgets — prices have increased 4.5 per cent in the past year, according to the MLS Home Price Index.

Family houses are also in demand in Kitsilano, says Wilson, which is home to Vancouver’s most expensive property: a 15,000 sq ft home owned by Lululemon founder Chip Wilson, recently valued at C$74mn.

Neighbouring Point Grey, overlooking the Burrard Inlet, is where Canada’s most expensive current listing is found — a newly built 12,400 sq ft mansion priced at C$55.8mn on Belmont Avenue, one of the city’s premier streets.

West Vancouver, on the opposite side of the Burrard Inlet to the city centre — where the average price is nearly C$2.66mn, according to the MLS Home

Price Index — is home to some wealthy enclaves, too. Kevin O’Toole, managing broker at Canada Sotheby’s International Realty, cites Altamont, Caulfeild and Dundarave as popular locations there: “Waterfront homes in West Vancouver tend to be direct access and have fantastic views of the city.”

The buying restrictions have been criticised for putting further pressure on the city’s already overheated rental market. Would-be tenants face stiff competition, with agents saying it’s typical to find 30-40 people chasing one property.

Prices have been rising rapidly — twobedroom units rose by 11 per cent in the year to October 2023, according to Rentals.ca — and the province has announced it will allow landlords to raise rents by 3.5 per cent in 2024. “When an investment property sells, three times out of four it will sell to an end user, decreasing the supply of rental homes. Lack of supply is what’s causing the [rental] affordability issue, not foreign buyers or investors,” says Skipworth.

Other foreigners compromise in what they buy. Jess Macindoe, a 31- year-old operations manager at an urban planning company, who moved from New Zealand in 2017, bought a 900 sq ft studio flat in a converted 1930s warehouse in East Vancouver last year for C$615,000 which she and her boyfriend are converting into a two-bedroom flat. “It had zero bedrooms and no outside space, but we didn’t want to be fussy in such a tough market,” she says.

‘Lack of supply is what’s causing the rental affordability issue, not foreign buyers or investors’

The extreme flipsides, too, of a city with high demand and short supply of housing at all levels are severe and growing incidences of homelessness and drug addiction. “It used to be concentrated on the east side but since the pandemic these problems have grown massively,” says Andrew Haddock, a project manager from Manchester, who paid C$457,000 in 2019 for his one-bedroom flat in New Westminster, a riverside area whose heritage houses are a magnet for film companies.

Foreigners may face uncertainty over whether they are eligible to buy in Vancouver, but one thing many are sure of is the appeal of the active, outdoors lifestyle it affords them. “People call this town an adults’ playground. It’s addictively beautiful and an epic place to explore,” says Macindoe