While its objectives were admirable, the British Columbia government tarried too long on imposing the 15 per cent foreign home buyers’ tax in the province, according to Vancouver mayor Gregor Robertson.
In a Globe and Mail
interview, Robertson stated that the situation in Vancouver has reached the “breaking point”.
“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.”
In August, sales volume plummeted by a staggering 26 per cent year-over-year. The decline came right after the implementation of the levy earlier that month. Home prices stood flat, however.
“The jury is still out on whether it will have the desired effect,” Robertson noted. “Whether it was going too far is the big question. But we needed something to cool the market.”
As to the possibility of a similar tax in Toronto, Robertson argued that the city’s housing situation would be far better served by the construction of more rental units, along with a tougher campaign versus tax-evading home flippers and intensified efforts to gather data on the effects of foreign capital on the local market.
“Toronto has a little more breathing space, which is helpful,” Robertson said. “But it also has some unique challenges. What works in Vancouver won’t necessarily work in Toronto.”
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