The province has released the latest batch of numbers on foreign buyers in Metro Vancouver, and they show B.C.’s new tax having a big impact.
The latest data show foreign buyers made up 1.8% of Metro Vancouver’s 5,150 sales in September, and just 1.3% of sales since the new foreign buyers’ tax began August 2.
Stack that up against the 13.2% of residential sales they were the month before.
That September of number does, however, show some bounce from the immediate aftermath of the tax.
Foreign buyers in August acquired just 0.9% of properties, meaning activity did double in September.
September’s sales made up 1.8% of the total value of properties sold, while in the full period since the tax kicked in they made up 1.3%. The provincial average is 1.8%.
Province wide, the data shows foreign buyers accounted for $318-million in sales since the new tax kicked in.
The province also says it’s hauled in an extra $10-million in property transfer tax, and says auditors have fired off another 150 compliance letters to buyers to ensure they’re citizens or permanent residents.
Sales have plunged in the region since the new 15% tax kicked in, down by a third year-over-year in September.
But prices have yet to catch up, still up 29% on average last month.
City to city
The steepest decline has come in Burnaby, where foreign buyers snapped up 24.2% of properties in the month before the new tax, while they’ve bought just 1.2% in the months since.
It’s a similar story in Richmond where they accounted for 24.7% of pre-tax sales, but just 3% of sales post-tax.
In Vancouver, the rate dropped from 15.5% to 1.4% in the overall period since the tax kicked in, while in Surrey the decline has been from 9.6% to 0.8%.
UBC economist weighs in
UBC Economist Tom Davidoff says all fingers point to the foreign buyer’s tax.
“Most of the action is gone and so I expect we will continue to see lower numbers then we had in the past to foreign buyers. If I had to guess we would probably be in the 2 to 5 per cent range for the month of October and probably for the foreseeable future.”
When the government first tracked sales, data showed 13.2% of homes were scooped up by foreigners during a small window right before August.
The levy was brought in to cool down Vancouver’s housing market
With files from Emily Lazatin