British Columbia’s 15 per cent foreign home buyers’ tax has essentially chased away a significant proportion of wealthy overseas buyers from Canada’s most expensive city, according to the latest numbers from the Real Estate Board of Greater Vancouver.
The Board announced a drastic 33 per cent year-over-year drop in home sales volume last month, likely indicating an end to the industry dominance of Canada’s erstwhile hottest selling market, the Financial Post
“There’s no doubt — the number of transactions has gone down and homes are on the market longer,” Board president Dan Morrison said. “The tax spooked everybody, and even locals are now holding back and watching.”
Complicating matters is mayor Gregor Robertson’s plan to impose a tax on unoccupied residences by next year, as well as the federal government’s October 3 announcement of new rules governing mortgages, which are intended to cool down growth in the country’s most overheated markets.
“[The new measures will] likely cause a pull back in activity, creating more questions on the direction of where the market is heading,” Royal LePage Vancouver agent Adil Dinani said. “Market activity ultimately comes down to sentiment.”
Apart from the slowdown in transaction numbers, properties are also taking far longer to get sold. In some instances, home types that took as little as 14 to 21 days to sell are now staying listed for twice as long.
In an interview, Robertson lamented that the situation in Vancouver has reached the point of no return.
“The dire warnings of the banks and financial institutions about the precipice that Vancouver or Toronto stands on with real estate and foreign investment have triggered waves of concern through the political ranks,” Robertson said. “Middle-class Canadians being able to buy a house in Vancouver and Toronto, those days have probably passed because the interventions didn’t come.”
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