There are more anecdotes of a market slowdown caused by the new foreign buyer tax in Vancouver. This latest batch from the North Shore News:
Local real estate agents say they know of several multi-million-dollar real estate deals collapsing and predict the hot North Shore housing market will cool slightly in the wake of a new 15-per cent provincial tax on property purchased by foreign buyers.
“It’s one of the most shocking events that’s ever arrived in our industry,” said Brent Eilers, a longtime West Vancouver Realtor with Re/Max. “Nobody really knows how it will unfold.”
Eilers said the new foreign buyers’ tax is bound to have an impact, particularly in markets like West Vancouver and North Vancouver, which have been “incredibly dependent on offshore money or new money” that’s come from sales to foreign buyers in other areas of the Lower Mainland.
Read the full article here. So far it looks like sales are dropping and listings rising over the last few months. According to zolo, the average sales price in Vancouver has dropped by a few hundred thousand dollars since March.
The BC Court of Appeal has upheld the right of a strata corporation to limit rentals in a condo building.
The ruling on Friday states that the strata council of Hycroft Towers in Vancouver’s South Granville neighbourhood can restrict its owners from renting out their suites – without explaining why – because anyone who feels they have been treated unfairly can take their case to the B.C. Supreme Court.
The dismissal of the appeal reinforces the right of strata councils to stop rentals in their buildings, a tactic that experts say might be creating more pressure on the region’s extremely tight rental market.
The case centred around a family that began renting out one of the three units they owned at Hycroft Towers last September – despite an earlier rejection of their application to expand the rental pool in the building by the strata council.
The family argued that, under the province’s strata laws, the council must also provide the criteria by which it grants permission for owners to rent their units.
However, Justice Gregory James Fitch ruled that it is “difficult to imagine that an acceptable screening criteria for administering the rent restriction cap [such as the ‘needs-based’ system proposed by the appellants] could be devised that would comply with [provincial law].”
Ah, condo ownership, where you get all the bills without the hassle of all the control.
Read the full article in the Globe and Mail.
On a side note, we’ve disabled the inline image rendering in comments. We made it a surprisingly long time before it degenerated into out of control garbage and it was nice to be able to see the occasional graph rendered in a comment, but clearly you people can’t be trusted.
The recent announcement of a 15% foreign buyer tax was a surprise to a lot of people. Even finance ministry staff were kept in the dark about the tax.
One of the few exceptions seems to have been a very successful local condo marketer who also happens to be the chief fundraiser for the liberal government.
Mr. Rennie said he knew an additional property transfer tax for foreigners was coming about three weeks ago, but he figured it would be about 5 to 8 per cent. He said a more holistic approach would have created a tax targeting speculators of any nationality for flipping properties rapidly and “interfering in the market.”
But as Rennie points out, the polling showed that people were ‘frantic’ and specifically wanted a tax on foreign buyers. He has since clarified that it was an astute assumption based on those polls rather than inside information that led him to believe a foreign buyer tax was coming. He has offered to step down as the chief fundraiser if the BC liberal government asks him to.
Though the optics of a marketer having advance knowledge of a surprise tax in his market isn’t great, what advantage could be taken of this position?
So far the tax has mainly provided marketing opportunities and big headlines of a 75% drop in sales even though most sales haven’t been recorded yet. Nobody really knows what affect this tax will have on the market if any, so what would you have done with a 3 week advance notice that this tax was coming?
Here’s a good way to get your listing in the news:
One Metro Vancouver realtor says he will cut the sale price of his own Richmond home by 15 per cent for any international buyer, in a response to the province’s new levy against foreign citizens who want in on the region’s overheated housing market.
Eddy Chen says a person from Mainland China was in the midst of completing the paperwork on the purchase of his $1.98-million house last week when the government announced its new tax, which comes into effect Tuesday. The buyer walked away after the government’s surprise announcement because they could not get a home inspection or mortgage approved fast enough to avoid an extra $298,000 brought on by the new levy, he said.
“They said they don’t think it’s fair to foreign buyers, so they want to wait and see what happens [to the market],” he said. “There’s no point for them to rush it through, because they thought they were ripped off by those extra taxes.”
Now, he has upped the price to $2.35-million, but says he will take 15 per cent off for any foreign citizen hit by the new property transfer tax so they “have an equal opportunity to get the property.”
Thank goodness there’s still a sense of decency and fairness in the world. Read the full article over at the Globe and Mail.
TTUL shared this graph of whats happening lately in the listing vs sales ratio. This is a sharp difference from the last few years, but it’s only been a short trend:
TTUL also shares a link to his data, which is based on numbers shared regularly on this site by realtor Paul Boenisch.