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A housing frenzy in Canada that even owners want to rein in
[VANCOUVER, British Columbia] Between multimillion-dollar teardowns, blocks full of backyard cottages and towering condominiums that are sold and resold several times before they are even built, there is no shortage of anecdotes about this city's housing frenzy.
Here is a new one: Vancouver is so expensive that politicians want to tax its real estate market into submission, and many homeowners — who will lose money if home prices fall — think it's a great idea.
House and condominium prices in Vancouver are up by close to 16 per cent over the past year and about 60 per cent over the past three, according to the Real Estate Board of Greater Vancouver. Part of the reason is the attraction of Vancouver itself, and not just among Canadians: Between its natural beauty, its temperate climate and Canada's liberal immigration policies, the city has become a magnet for foreign buyers, especially from China.
Vancouverites are so shocked at the price levels that even homeowners want the market to cool. In 2016, the nonprofit Angus Reid Institute in Vancouver found that roughly two-thirds of residents in the metropolitan area wanted home prices to fall, including half of homeowners.
Last year, in a provincial election almost entirely about housing costs, citizens voted out the center-right BC Liberal Party and brought in the left-of-center BC New Democratic Party. Since then, the New Democrats have proposed a slew of housing measures.
The party raised British Columbia's foreign-buyer tax to 20 per cent of a home's purchase price, from 15 per cent. It also plans to impose higher property taxes on second homes, on families whose primary breadwinner's earnings come from money abroad and on homes valued at more than 3 million Canadian dollars (S$3.07 million). Vancouver has passed local measures, including a tax on empty homes.
"There's no question that many of the measures we are bringing in are bold, but we felt they were critical if we were really going to address this crisis," said Carole James, British Columbia's finance minister.
So far, people like what they see: In an Angus Reid poll, large majorities supported the housing measures.
"Unbeknownst to many people in the local population, Vancouver has been sold as a subsidized resort town and retirement community to the world," said Josh Gordon, a political-science professor at Simon Fraser University. "We are now seeing the culmination of that dynamic."