Those that complain about the Vancouver Sun only printing pro-real estate fluff should read the latest Don Cayo article about the costs of home ownership and government influence over prices. It brings up some interesting points about land management issues, tax incentives and speculation:
The impact of speculators on the market, at least as judged by visibly vacant homes, seems focused on condos, and mostly in just a few neighbourhoods such as Coal Harbour.
But property tax consultant Paul Sullivan, who with his wife, a builder, keeps a particularly close eye on West Side transactions, says almost half of condo pre-sale buyers won’t ever live there, and almost a quarter flip the properties before they’re ready to occupy.
Andy Yan, an analyst and researcher at Bing Thom Architects, sees this kind of speculation as hurtful to the economy, and suggests taking a leaf from places like Hong Kong, Singapore and Australia, which have found ways to curb it. Yan suggests more focused use of the Property Transfer Tax, exempting the kinds of transactions people make as they move through a normal life cycle, but nailing speculators. And then there’s a final policy area where it’s what governments don’t do that influences housing costs in two contradictory ways. It’s the issue of the ubiquitous “mortgage helpers” — basement suites that, legally or illegally, allow buyers to purchase much more home than they could otherwise afford. These both drive up the cost of residential property (though the net result is greater affordability), and provide low-cost rental units to those who can’t afford to buy.
There’s no way to know how many of these escape the taxman’s notice. But to the extent that neither income tax collectors nor property tax assessors aggressively track these suites down, they enjoy a degree of tacit official blessing.
Read the full article over at the Vancouver Sun