Figures from the province’s Finance Ministry showed that the ratio of real estate deals involving foreigners declined to less than 1 per cent after the tax was levied last year.
“There is a huge drop,” Andrey Pavlov of the Simon Fraser University told the Vancouver Sun
. “There may be some seasonal variation, like there normally would be on all transactions, but the drop is so significant that it couldn’t possibly be explained by seasonal variation.”
Many of these would-be buyers have backed out from Vancouver’s luxury segment in particular, Fraser said. Ministry data revealed that only 8 properties worth over $3 million have been bought by overseas nationals in November, a drastic drop from the 95 transactions in July 2016.
The total value of Vancouver home purchases in November stood at $295.8 million, a miniscule proportion compared to the $3.5 billion total in the half-year span starting June. Residential property transfers from June to November also fell by 42 per cent.
Still, Pavlov noted that it will take a while to gauge the actual impact of the tax.
“We’re not going to have apples to apples comparisons until next June.”
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Implemented in August 2016, the B.C. government’s 15 per cent tax on foreign buyers has proven crucial in damming the entry of overseas capital into Vancouver, according to a markets observer.