The city of Vancouver has floated the idea of an ’empty home tax’ to help encourage the availability of rental supply. Today is the last day they will take feedback online for this idea.
If you have ideas for or against an empty home tax now is the time to have your input. What should be taxed and what should be exempt?
Best Place on Meth points out a rather obvious loophole and asks how it would be dealt with. Will there be baseline expectations for what is or isn’t market rent?
What’s to stop these owners from listing it for rent at some outrageous price that nobody will pay and then claiming they did try to rent it out?
What do you think – is the idea of an empty home tax a good or bad approach to Vancouvers housing problems?
Some people say there are three stages to a bubble: denial, concern and capitulation. Have we reached the last stage yet?
This comment from YLTNboomerang:
I’m almost ready to call this bubble done, my evidence?…my historically poor timing! Family is getting flown down to TX next month for interviews and to check out RE/Lifestyle that Houston offers. If we finally pull the trigger and move South, even for tremendously more dough, I will post it and that will be the point that YVR becomes cheap cause as a bear since 2007 I can’t get this F*&$er timed right. BTW, I already stipulated a “Trump clause”, if through regime change foreign workers are kicked out, I get 3 years pay and no non-compete plus relocation costs.
Any one else hit the capitulation stage yet?
It’s looking like lending for real estate is going to get a bit more pricy as Ottawa tightens rules and seeks to offload some risk. Many lenders in this Globe and Mail article feel blindsided by the change and complain that it’s unfair as they will not be able to compete with the banks:
Non-bank lenders left reeling by new federal mortgage rules
The new rules kick in November 30th after which lenders will not be able to insure mortgages with amortization beyond 25 years or on homes over $1million or rental properties. I guess we’re about to find out the price of risk in these no longer covered categories.
Vancouver home sales have plunged by about a third in the last month or so, this been largely blamed on the foreign buyer tax.
But that tax focused on the city of Vancouver isn’t the only change to the real estate market, new rules and changes have the potential to affect the wider region and the nation as a whole. Southseacompany posted this summary from a Globe and Mail article in the comments:
“Four major changes to Canada’s housing rules”, Globe & Mail
1. Expanding a mortgage rate stress test to all insured mortgages.
2. As of Nov. 30, the government will impose new restrictions on when it will provide insurance for low-ratio mortgages.
3. New reporting rules for the primary residence capital gains exemption.
4. The government is launching consultations on lender risk sharing.
As Canadian Mortgage Trends puts it, is this the last nail in the coffin?
NOTE: disagreements are fine, but repetitive personal attacks and insults to other posters will get you an IP ban.
So are we ‘world class’ yet?
Despite not making it onto lists of the worlds most economically powerful cities, Vancouver is finally being compared to London, Stockholm & New York and we come out on top!
Swiss bank UBS has named Vancouver the city with the worlds riskiest housing bubble:
UBS said Vancouver prices were unaffected by the financial crisis in 2008 and continue to rise despite weakening commodity prices.
“Over the last two years, the housing market has gone into overdrive due to strong demand for local properties among foreign investors and a loose monetary policy,” the report said.
“Currently, house prices in Vancouver seem clearly out of step with economic fundamentals, and are in bubble risk territory.”
Hot on the heels of Vancouver are London and the Swedish capital, Stockholm. The report stated that, with the exception of Milan, low interest rates in the euro zone have pushed all the European cities reviewed into bubble territory.
Read the full article over at CNBC.