It didn’t take long for BC’s property tax hike to axe the real estate market in greater Vancouver.
Home sales were already sliding in the Lower Mainland, down from a year ago by 19% in June, and 31% in July, however the Real Estate Board of Greater Vancouver reports that in the last two weeks of July, sales fell off by 42% over 2015.
The report points out that the sliding numbers can’t officially be tied to the foreign buyers’ tax.
However it does ask the question of whether locals and foreigners alike would have been pursuing deals as the market reacts to the levy against a segment of buyers (read: offshore Chinese purchasers) that were involved in one in five transactions in some communities before the tax was implemented.
One analyst noted, “If you were looking to purchase in the market and then a 15% foreign buyers tax was introduced, would you want to purchase that week, would you want to purchase two weeks from then, or would you perhaps say, ‘Maybe I should just wait a month and see what happens to the market. Or wait two months?’”
With values rising over 30% in the past year, Premier Christy Clark, who faces an election next year said she hopes it would limit international demand to rein in ‘those silly price increases we have seen’ in Metro Vancouver.
With the new tax, it is expected that the Vancouver housing market will now react to the same news that affects the housing markets in the rest of Canada, economic news, which is generally driven by unemployment numbers.
BC’s unemployment numbers are among the best in the country. You do the math.