VANCOUVER (NEWS 1130) — A federal foreign buyers tax likely wouldn’t push housing prices down significantly, especially in our region, says an expert.
UBC economist Tom Davidoff, with the Sauder School of Business, is providing that assessment, with the Liberal government saying it plans to push ahead with that measure.
The government says the plan will benefit first-time homebuyers and put more homes on the market by taxing homeowners who use Canada to passively store wealth in housing.
Davidoff points out measures already taken by the province and cities like Vancouver have potentially already done the heaving lifting on that front in B.C.
“If this were 2016, I think the consequences could be quite significant,” says Davidoff. “But given we’ve already had the [provincial] foreign buyer tax, and the empty homes and speculation taxes, I would imagine the base for this tax is going to be quite small.”
Davidoff says if the tax does have any impact on prices, that will likely be restricted to higher-end properties.
“It will raise some revenue for the government,” acknowledges Davidoff. “It may have some additional impact on lowering prices, probably largely at the higher end of the property distribution, but in the short run I don’t see much price impact at all.”
Last month, home sales were hot in Metro Vancouver — 24.6 per cent above the 10-year average for the month — with prices pushed up to a benchmark $1.5-million for a detached house, according to the Real Estate Board of Greater Vancouver (REBGV). The price is up 10 per cent from last year.
Meanwhile, the low number of homes for sale and ongoing demand has RE/MAX predicting a four to five per cent price increase for Vancouver homes in 2021.
-with files from Mike Lloyd and the Canadian Press