Number of Mortgage-Free Homes in Vancouver Points to One Thing: Foreign Money

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'If this isn’t a clear sign of foreign money in Canadian residential real estate, I don’t know what is,' according to a long-time mortgage expert. ronmortgageguy | GoldinYVR | pmcondon2 | Ayan604 | realestate realestatenews Vancouver mortgages

The fact that half of Vancouver homeowners are enjoying a mortgage free life reveals the unique nature of the Vancouver market, says the owner of a large Canadian mortgage brokerage.

For a city with a lower household income, the difference doesn’t make sense unless global inflows of wealth are considered. Median household income in Toronto is $84,000, according to Statistics Canada’s 2021 census data. Vancouver’s household income is $82,000. Calgary has the highest, at $98,000, and yet that city only has a mortgage-free rate of 35%.

Butler says the general belief among mortgage brokers is that the rate of free and clear title typically falls into the 37% to 42% range. Seattle is at a normal 37%, according to census data by demographics website Data USA. San Francisco is at 29%, and so is Los Angeles. New York is at 33%. The highest rate of free and clear title is in Vancouver’s priciest neighbourhoods, over 60% in Oakridge, Kerrisdale, Point Grey, and Shaughnessy.

“The advanced age of many owners gives them time to pay the mortgage off, and the using up of built-up equity in a long held home allows them to ‘move up,’ or downsize within the region, paying cash as a result,” he says. “[The third] is of course, global money investing in what has been a sound investment for decades, especially lately, in Vancouver real estate. They pay in cash but often with leveraged capital gotten from who knows where.

 

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ronmortgageguy GoldinYVR pmcondon2 Ayan604 Absent a discussion of the demographics in those areas you're jumping the gun to come to the conclusion of foreign money.

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