With the introduction of the foreign homebuyer’s tax last August (2016), there were differing opinions on how exactly this would impact the Vancouver property market. For example, some speculated that this would dramatically impact the soaring housing prices that had continued to discourage many homebuyers … as well as renters, while other’s didn’t think it would have the actual intended result of counteracting the housing affordability crisis in Vancouver.
Now that we are over a year since the government implemented this tax, the question remains … is the Vancouver property market still boosted by foreign buyers?
Foreign buyers are still interested in purchasing property in Vancouver and, as a realtor, I still see a number of inquiries coming in from individuals looking to invest in local properties. However, one piece of information appears to be true, that there does appear to be less foreign buyers participating in the Vancouver housing market compared to last year.
With that said, housing prices in Vancouver do not seem to be budging and instead, still remain as high as ever. While prices may have dropped a bit on the heels of the foreign buyers tax introduction back in August of 2016, by January of 2017, they had already experienced a resurgence, continuing to grow higher, once again.
If you look really closely at the situation, the foreign buyer tax could well have allowed for a slowdown in the overall home sales across Vancouver, however when all is said and done, housing prices themselves, didn’t stay down for long.
Condominiums in particular, have continued to soar, despite the introduction of the foreign buyer’s tax. As recent as this past spring, the median price for condos across the greater Vancouver area were as high as $600, 700. This means an increase of almost 18% from the previous year – just prior to the foreign tax.
As previously mentioned, foreign buyers have varying methods of dealing with the foreign buyers tax. While some may try to work around the system, many however, are likely to continue to stick it out and if their finances support it, continue to manage the increase in taxes they are expected to pay towards their second properties.
For those that have decided to sell their units in order to avoid theses taxes, this perhaps has accounted for the decrease in foreign buyers. That being said, whether or not the foreign buyers are still having the same level of impact on the Vancouver property market or, one thing’s for sure, the housing market itself does not perhaps appear to be as heavily influenced by this government action as some Vancouver residents may have believed.
In the end, for those of you who are looking to become a home owner in the Metro and Greater Vancouver region, keeping apprised of how movements, like the foreign buyers tax will impact their ability to successfully navigate the housing market is always an important steps towards participating in the Canadian property ladder.