Industry self-interest clouding discourse around B.C. tax - analysis

by Ephraim Vecina02 Sep 2016
The real estate industry cannot be trusted to remain objective about the B.C. government’s recent imposition of a 15 per cent property transfer tax on foreign buyers, according to a veteran observer.
In an August 31 analysis, The Globe and Mail national affairs columnist Gary Mason noted that the emergence of an increasingly loud chorus against foreign investors—supposedly funnelling unchecked sums into Canadian real estate—essentially left B.C. officials with no choice but to take quick action.
“The province’s long-governing party faced the real prospect of losing next year’s election unless it did something to address public anger over the high cost of housing. Which is how we ended up with the government in July imposing a 15-per-cent property-transfer tax on foreign nationals buying real estate in Metro Vancouver,” Mason wrote.
The industry’s response to the tax has been baffling, he added, especially since their concerns about foreigner-driven price spikes became visible only recently.
“It was not long ago that the real estate community in Metro Vancouver held an unequivocal view of the notion foreign nationals from China were buying up the region in bulk and forcing house prices obscenely skyward in the process: It was unadulterated bunk,” Mason said.
“It has been fascinating, in the interim, to observe the angst the tax has stirred in the same real estate sector that had been insisting foreign nationals had little to do with the spectacular rise in house prices. Today, many [industry players] are suggesting sales have fallen off a cliff since the tax was introduced. Prices are cratering.
The analyst argued that any Chicken-Little-style warnings of the “death of real estate” in B.C. would be “ludicrous”.
“What it may affect is the eye-popping commissions many agents in this province, and in particular Metro Vancouver, have been pocketing,” Mason mused. “If the tax has, in fact, slowed sales activity, this is only a good thing, as the gold-rush mentality that had taken hold was creating a price bubble that had become increasingly concerning for lending institutions across the country.”
“It is clearly impossible for the real-estate industry to separate the public good from its own self-interest,” Mason concluded. “Consequently, most anything [agents] or their proxies say about this issue needs to be greeted with profound skepticism, if not outright dismissal.”


  • by Lex 9/2/2016 2:56:06 PM

    What people don't realize is that foreign buyer that are buying for investment are buying the big luxury homes that are in the millions how does that drive the prices up for your everyday starter home buyer?
    The other so-called foreign buyers are international students that have a job here that have finished university and want to stay in Canada and contribute to the skilled workforce applied for PR that wants to buy a home to get a head start being also classified as foreign buyers raising housing prices. Most industry members can agree since May of 2016 before this 15% tax we are already seeing less multiple offers. The market seems to be declining already. I am talking about the lower and average priced homes, not the ones that are selling for Millions. I have lots of local buyers all Canadians that are no longer buying right now because media is saying price drop and correction of 10-20% the market only cooled now because people are waiting once they realize that the supply remained the same and there is way more demand it will take off again.

  • by peter b. realtor 9/2/2016 7:11:19 PM

    What a mixed bag of nonsense. This "tax" did nothing to cool the market. The market is cooling due to over-valuation. This was expected. The 15% tax has hurt many would-be buyers that are being unfairly punished and what rubbish it is to claim that all agents are making "eye popping commissions". Any wold-be buyer intending to purchase a live-in home now has 15% less to spend on furnishings and services for their new home. Which stupid government official was too blind or self-serving to see this (self-serving as they did not want to look as if they were failing to recognize the issue of foreign (living outside of Canada, not foreign person living and working in Canada)? All of them.
    No doubt they will take credit for "taking effective steps to make the housing market more accessible to average buyers...

  • by Incroyable 9/2/2016 10:08:43 PM

    It's amazing to see just how much foreign buyers were affecting the market.

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