New rules introduced in Vancouver last year to quell the number of foreigners buying a property in the city have already began to have the desired effect.
The BC government imposed a 15 per cent tax on foreign investment last August, to try and slow rapid property price growth in the city. It was believed that high foreign investment – approximately 13 per cent of all Vancouver property transactions were conducted by overseas buyers in the first eight months of 2016 – were responsible for record price growth.
“There is evidence now that suggests that very wealthy foreign buyers have raised the price of housing for people in British Columbia,” the province’s premier Christy Clark said last August. “The foreign buyer tax is intended to make sure we can keep home ownership within the reach of the middle class.”
Announcing the measure, the government of British Columbia said that demand from foreign investors — many from China — had increased the cost of a detached home some 39 per cent in just 12 months.
Since the introduction of the rules, foreign investment in British Columbia is now as little as four per cent. What’s more, property prices in the city dropped by 18.9 per cent between January 2016 and January 2017.
“The tax is helping manage excessive demand in the region’s residential real estate to allow the housing market to respond by building new homes to meet local needs,” a spokesperson for the British Columbia Ministry of Finance said. “Revenues from the tax are also helping fund provincial housing affordability measures.”
Article published 20th March 2017