The Urban Development Institute hosted a major discussion Wednesday on the connection between foreign ownership and Vancouver’s heated real estate market.
The talk-fest happens to be going on amid media reports that foreign buyers pay little in taxes.
But is that artificially inflating housing costs?
Discussion panelist and economist Professor David Ley says it is, and the federal and provincial governments need a plan to deal with it.
“We need protection for existing affordable properties. I’m thinking especially rental properties, which are being demolished all over this region without clear policy protection.”
According to this year’s Demographia International Housing Affordability Survey, Vancouver is the second most unaffordable city in the world, second only to Hong Kong.
Yet there’s very little data to explain why.
Conservative Leader Stephen Harper recently promised to spend half a million dollars to monitor foreign investment’s impact on Vancouver’s housing market.
A report by the city on the same issue is expected in the new year.
That hole in our knowledge base hasn’t stopped the speculation, with some theorizing (or blaming) that Chinese mainland buyers are responsible because they’re stocking up on inner city condos.
That blame game may be connected to incidents of vandalism against murals in Chinatown, a community that has little in common with China’s nouveau riche.
Despite Harper’s half a million dollar promise, the Conservative government already nixed changes to foreign ownership rules, and scrapped the Long Form Census five years ago, which may have shed some light on the growing problem.
Meanwhile, the two other major parties have made tax incentives for developers part of their policy plank to tackle affordable housing.
Australia’s answer has not diminished real estate growth
But if there’s a link between the two to be found, Canada may go by the way of other countries that have clamped down on “illegal” foreign ownership.
That includes Australia, which introduced massive fines, and even jail time, through reforms popularly received by both the public and the real estate industry.
Meanwhile Australia’s real estate market has continued to climb.