An economist with the BC Real Estate Association says an idea from Vancouver’s mayor to slow foreign real estate sales has some potential drawbacks.
Cameron Muir says the first concern would be how much property tax is being talked about here.
“The concern I guess would be the concentration of foreign investors in the tonier pockets of Vancouver you know how much of a tax or a disincentive would you have to put in there in order to dissuade wealthy foreigners from buying in those markets.”
Muir says people selling their Vancouver home could also be impacted.
“The other is that there is both buyers and sellers to a transaction. If you are a home owner looking to sell your property in Vancouver and you have buyers both domestically and foreign who are bidding on that property you are likely to be happy that you have that extra competition in order to garner a better price for your home.”
Muir says the data shows there are also simply not enough foreign buyers to actually drive the market.
“The data does suggest that offshore buyers or lets say investors in residential real estate from all sources are relatively small proportion of the market. So in Vancouver one to four-percent any given month of home sales are from foreign investors. Certainly enough to potentially drive up prices if they are focused in a certain neighbourhood.”
Muir says affordability is a relative term as many first time home buyers are having few problems getting into condos at a reasonable price.
Although he admits there is a significant premium when it comes to single detached homes.
Mayor Gregor Robertson is floating the idea of a special property tax possibly targeted at offshore investors to try and slow down rising housing prices.