The BC Real Estate Discussion Thread

[Harvey Spector]

21 minutes ago, One one two said:

Yeah but you get to work from home.

[Realtor Rod]

1 hour ago, DonLever said:

Voting for NDP will not solve the housing crisis.  What can the NDP do?  Absolutely nothing because market forces are at work.

 

The problem is 30,000 - 50,000 people are coming into Metro Vancouver.   They have to live somewhere and if they want to live in a detached home, forget it.   They are simply no more land to build more detached housing in Vancouver or the suburbs.

 

Even rental housing is at a premium.   What is the vacancy rate in Vancouver?  Less than 1%.

 

One solution is higher density but every time that is proposed neighbourhoods scream and yell no way.

My statement was made more as a point of how bad the liberals have botched things versus any other party. Maybe they can bring back the HST.

[Alflives]

Yes it's expensive to live here, but it's the best place on the planet - of course it's costly.  If people can't afford it here, get a place elsewhere.  There are way cheaper spots, that offer jobs too: GO THERE.  People have been going to cheaper, easier, more opportunistic places for a very long time.  Just go.  I really don't get this complaining.  

[Harvey Spector]

Vancouver Home Prices Will Be Higher This Time Next Year: Leading Economist

Foreign buyer tax has resulted in “policy shock,” but market will quickly recover to see prices higher than they are now, predicts Central 1 Credit Union chief economist

 

The “policy shock” of the new foreign buyer tax has created a “temporary market disruption” that will play out over the next three to six months, after which “market fundamentals” will mean the market recovers, according to a leading economist.

Speaking to a sold-out audience at the Urban Development Institute’s Foreign Buyer Tax luncheon and panel debate September 16, Helmut Pastrick, chief economist at Central 1 Credit Union, said that he expects house prices to recover so that they are higher this time next year than they are today.

Pastrick said, “I fully expect September’s sales to be down again, year-over-year, probably by 30 or 35 per cent compared with last September. The average price will probably fall again, relative to August, and this will play out over the next three to six months – it’s a temporary market disruption.

“After the market has absorbed this new tax regime, we will begin to see other market fundamentals come into effect. Prices will then continue to rise, and they will be higher this time next year.”

Pastrick’s fellow panellist at the UDI lunch, Tsur Sommerville, associate professor at UBC’s Centre for Urban Economics and Real Estate, added, “In other markets where a foreign buyer tax was introduced, such as Hong Kong and Singapore, in both those markets, prices continued to rise.”

Pastrick said later in the discussion, “I think home prices will begin to increase again, but at a slower rate. I expect to see higher prices until this economic cycle comes to an end, as all cycles do… But recessions only last a short while, and the cycle begins again. And in the long term, I would expect that over the next two or three decades, [Vancouver real estate] prices will double again, if not more than double. But there will be more economic cycles between now and then.”

He added, “Right now we don’t see any signs of an economic recession due to a shock event – we’re in a strong economic cycle.”

Sommerville added, “In terms of the demand side, you’ve got the combination of the strong economic cycle, low interest rates, and a demographic profile where you’ve got a large number of young people ramping up into home ownership. There are more Millennials than any other group, so you’re going to have a huge increase in housing demand, in a market where the ability to respond on the supply side is securely constrained.”

Sommerville’s colleague Tom Davidoff, associate professor at UBC’s Sauder School of Business, who was also on the luncheon panel, said that despite the strength of the economy and demand, there was still a significant risk of a sharp correction in home prices due to the foreign buyer tax.

He said, “A potential collapse in foreign buyer demand… could result in a less-bad version of what happened in the United States [in the sub-prime crisis of 2008]. There is a significant risk of an over-correction in prices – but I wouldn’t say that is the most likely outcome.”

The fourth member of the panel was lawyer Arnon Dachner, a partner at Dentons LLP, who warned delegates that tactics to avoid paying the foreign buyer tax – even seemingly legal approaches, such as contract reassignment – could be defined as an “avoidance transaction” that could leave the party still liable for the payable tax or other monies lost to the BC government.

The panel debate was moderated by Neil Chrystal, president and CEO of Polygon Homes, who recently told REW.ca that that he thought the overseas buyers’ tax was “morally and ethically wrong” and added, “I wouldn't be surprised if it was challenged legally.” 

[Realtor Rod]

8 hours ago, Harvey Spector said:

Vancouver Home Prices Will Be Higher This Time Next Year: Leading Economist

Foreign buyer tax has resulted in “policy shock,” but market will quickly recover to see prices higher than they are now, predicts Central 1 Credit Union chief economist

 

The “policy shock” of the new foreign buyer tax has created a “temporary market disruption” that will play out over the next three to six months, after which “market fundamentals” will mean the market recovers, according to a leading economist.

Speaking to a sold-out audience at the Urban Development Institute’s Foreign Buyer Tax luncheon and panel debate September 16, Helmut Pastrick, chief economist at Central 1 Credit Union, said that he expects house prices to recover so that they are higher this time next year than they are today.

Pastrick said, “I fully expect September’s sales to be down again, year-over-year, probably by 30 or 35 per cent compared with last September. The average price will probably fall again, relative to August, and this will play out over the next three to six months – it’s a temporary market disruption.

“After the market has absorbed this new tax regime, we will begin to see other market fundamentals come into effect. Prices will then continue to rise, and they will be higher this time next year.”

Pastrick’s fellow panellist at the UDI lunch, Tsur Sommerville, associate professor at UBC’s Centre for Urban Economics and Real Estate, added, “In other markets where a foreign buyer tax was introduced, such as Hong Kong and Singapore, in both those markets, prices continued to rise.”

Pastrick said later in the discussion, “I think home prices will begin to increase again, but at a slower rate. I expect to see higher prices until this economic cycle comes to an end, as all cycles do… But recessions only last a short while, and the cycle begins again. And in the long term, I would expect that over the next two or three decades, [Vancouver real estate] prices will double again, if not more than double. But there will be more economic cycles between now and then.”

He added, “Right now we don’t see any signs of an economic recession due to a shock event – we’re in a strong economic cycle.”

Sommerville added, “In terms of the demand side, you’ve got the combination of the strong economic cycle, low interest rates, and a demographic profile where you’ve got a large number of young people ramping up into home ownership. There are more Millennials than any other group, so you’re going to have a huge increase in housing demand, in a market where the ability to respond on the supply side is securely constrained.”

Sommerville’s colleague Tom Davidoff, associate professor at UBC’s Sauder School of Business, who was also on the luncheon panel, said that despite the strength of the economy and demand, there was still a significant risk of a sharp correction in home prices due to the foreign buyer tax.

He said, “A potential collapse in foreign buyer demand… could result in a less-bad version of what happened in the United States [in the sub-prime crisis of 2008]. There is a significant risk of an over-correction in prices – but I wouldn’t say that is the most likely outcome.”

The fourth member of the panel was lawyer Arnon Dachner, a partner at Dentons LLP, who warned delegates that tactics to avoid paying the foreign buyer tax – even seemingly legal approaches, such as contract reassignment – could be defined as an “avoidance transaction” that could leave the party still liable for the payable tax or other monies lost to the BC government.

The panel debate was moderated by Neil Chrystal, president and CEO of Polygon Homes, who recently told REW.ca that that he thought the overseas buyers’ tax was “morally and ethically wrong” and added, “I wouldn't be surprised if it was challenged legally.” 

Clarksons head is about to explode...

[taxi]

9 hours ago, Harvey Spector said:

Vancouver Home Prices Will Be Higher This Time Next Year: Leading Economist

Foreign buyer tax has resulted in “policy shock,” but market will quickly recover to see prices higher than they are now, predicts Central 1 Credit Union chief economist

 

The “policy shock” of the new foreign buyer tax has created a “temporary market disruption” that will play out over the next three to six months, after which “market fundamentals” will mean the market recovers, according to a leading economist.

Speaking to a sold-out audience at the Urban Development Institute’s Foreign Buyer Tax luncheon and panel debate September 16, Helmut Pastrick, chief economist at Central 1 Credit Union, said that he expects house prices to recover so that they are higher this time next year than they are today.

Pastrick said, “I fully expect September’s sales to be down again, year-over-year, probably by 30 or 35 per cent compared with last September. The average price will probably fall again, relative to August, and this will play out over the next three to six months – it’s a temporary market disruption.

“After the market has absorbed this new tax regime, we will begin to see other market fundamentals come into effect. Prices will then continue to rise, and they will be higher this time next year.”

Pastrick’s fellow panellist at the UDI lunch, Tsur Sommerville, associate professor at UBC’s Centre for Urban Economics and Real Estate, added, “In other markets where a foreign buyer tax was introduced, such as Hong Kong and Singapore, in both those markets, prices continued to rise.”

Pastrick said later in the discussion, “I think home prices will begin to increase again, but at a slower rate. I expect to see higher prices until this economic cycle comes to an end, as all cycles do… But recessions only last a short while, and the cycle begins again. And in the long term, I would expect that over the next two or three decades, [Vancouver real estate] prices will double again, if not more than double. But there will be more economic cycles between now and then.”

He added, “Right now we don’t see any signs of an economic recession due to a shock event – we’re in a strong economic cycle.”

Sommerville added, “In terms of the demand side, you’ve got the combination of the strong economic cycle, low interest rates, and a demographic profile where you’ve got a large number of young people ramping up into home ownership. There are more Millennials than any other group, so you’re going to have a huge increase in housing demand, in a market where the ability to respond on the supply side is securely constrained.”

Sommerville’s colleague Tom Davidoff, associate professor at UBC’s Sauder School of Business, who was also on the luncheon panel, said that despite the strength of the economy and demand, there was still a significant risk of a sharp correction in home prices due to the foreign buyer tax.

He said, “A potential collapse in foreign buyer demand… could result in a less-bad version of what happened in the United States [in the sub-prime crisis of 2008]. There is a significant risk of an over-correction in prices – but I wouldn’t say that is the most likely outcome.”

The fourth member of the panel was lawyer Arnon Dachner, a partner at Dentons LLP, who warned delegates that tactics to avoid paying the foreign buyer tax – even seemingly legal approaches, such as contract reassignment – could be defined as an “avoidance transaction” that could leave the party still liable for the payable tax or other monies lost to the BC government.

The panel debate was moderated by Neil Chrystal, president and CEO of Polygon Homes, who recently told REW.ca that that he thought the overseas buyers’ tax was “morally and ethically wrong” and added, “I wouldn't be surprised if it was challenged legally.” 

So an "economic expert", who just happens to be an employee of a credit union said things will continue to go up. Meanwhile, another "economic expert" on that same panel, Davidoof associate professor at UBC who has no personal interest states there is "still a significant risk of a sharp correction in home prices due to the foreign buyer tax."

 

Hmm....who's advise do I take:

 

1.. The guy who's job it is to sell credit - EX: mortagages - Sommerville. He also cites Hong Kong and Singapore as examples of places without corrections.....yet Hong Kong is in free fall right now:

 

http://www.bloomberg.com/news/articles/2016-05-11/hayman-s-bass-says-hong-kong-property-market-is-in-free-fall

 

Singapore is having their longest drop in two decades, with prices falling consistently for the last 2 years:

 

http://www.bloomberg.com/news/articles/2016-04-01/singapore-home-prices-have-longest-slide-in-almost-two-decades

 

 

2. The prof, who actually has reason to give an unbiased opinion.

 

 

Also, almost missed this little gem at the bottom:

 

Quote

The panel debate was moderated by Neil Chrystal, president and CEO of Polygon Homes

Another biased party, this time in charge of the moderation of the "panel". This article also comes from "Rew.ca", which isn't actually a news site but a site for real estate listing.The "article" itself is probably just sponsored content from Polygon Homes. 

[Harvey Spector]

1 hour ago, taxi said:

So an "economic expert", who just happens to be an employee of a credit union said things will continue to go up. Meanwhile, another "economic expert" on that same panel, Davidoof associate professor at UBC who has no personal interest states there is "still a significant risk of a sharp correction in home prices due to the foreign buyer tax."

 

Hmm....who's advise do I take:

 

1.. The guy who's job it is to sell credit - EX: mortagages - Sommerville. He also cites Hong Kong and Singapore as examples of places without corrections.....yet Hong Kong is in free fall right now:

 

http://www.bloomberg.com/news/articles/2016-05-11/hayman-s-bass-says-hong-kong-property-market-is-in-free-fall

 

Singapore is having their longest drop in two decades, with prices falling consistently for the last 2 years:

 

http://www.bloomberg.com/news/articles/2016-04-01/singapore-home-prices-have-longest-slide-in-almost-two-decades

 

 

2. The prof, who actually has reason to give an unbiased opinion.

 

 

Also, almost missed this little gem at the bottom:

 

Another biased party, this time in charge of the moderation of the "panel". This article also comes from "Rew.ca", which isn't actually a news site but a site for real estate listing.The "article" itself is probably just sponsored content from Polygon Homes. 

You missed this part:

 

Speaking to a sold-out audience at the Urban Development Institute’s Foreign Buyer Tax luncheon and panel debate September 16, Helmut Pastrick, chief economist at Central 1 Credit Union, said that he expects house prices to recover so that they are higher this time next year than they are today.

 

It wasn't just a hang out party with Polygon.  Also, you didn't show Davidoff (the unbiased guy's) full quote:

 

He said, “A potential collapse in foreign buyer demand… could result in a less-bad version of what happened in the United States [in the sub-prime crisis of 2008]. There is a significant risk of an over-correction in prices – but I wouldn’t say that is the most likely outcome.”

 

Also, the foreign buyers tax in Hong Kong was instituted in 2012, the market continued to rise after that so what the economist said is factually correct.  The fact that the real estate market in Hong Kong is in free fall 4 years later has no relation to the 4 year old tax, but is related moreso to what is happening now in the region.  

 

Nobody other than God knows what is going to happen really.  You have different economists giving different opinions, different lawyers giving different opinions, we even have a guy on this site in another thread who's predicting the end of the modern world with 20 year old flow charts and NASDAQ charts from 15 years ago.  

 

The economist did predict sales to drop another 35% this month which is likely going to happen and did say prices will fall over the next 3-6 months, which is exactly what I have been saying for the last month.  A 30% price correction isn't out of the question, which would basically bring us back to last year's prices.  Even a 40% drop brings us back to early 2014 prices.

 

The reality of the situation is this:  Even if we have a 40% price correction on single family detached homes bringing the median price in East Vancouver to around $960,000, the fact of the matter is that price is still unaffordable for the average or even above average working local Vancouverite.  So if prices fall 40% and then stabilize most people still won't be able to afford to buy a house in the City, which is what alot of people around here are saying.  

 

The days of a house in East Vancouver being worth $500,000, or even $700,000, are over.  Those days are gone and will never come back.  Even with a free fall in prices over the next year or two, the affordability issue in Vancouver will still be front and centre.  No amount of foreign buyers tax or any other type of taxes will get us back to prices from 7 years ago.  The last time a median price for a house in East Vancouver was $700,000 was exactly 7 years ago this month.  Only a complete economic collapse of the BC and Canadian economy worse than the US sub-prime crisis could ever bring us back to those prices.

 

I even read in the other thread about how CMHC was going to go bankrupt, by the same guy posting all the flow charts.  If CMHC only insures properties valued up to $1 million, which accounts for around 1% of all detached homes in the City, how is it possible they could ever go bankrupt?  99% of all homes in the "tax" zone have at least 20% equity in them if not alot more. Most people who own a condo or townhouse under $1 million can easily afford to pay their mortgage payments.  They will not default.  Also, unlike the US, the Canadian banks have the ability to foreclose and seize the property and sell it on the open market to recover their money, even if CMHC insured the mortgage, so it's not like CMHC would be left with nothing if someone walked away from their mortgage payments and their home.We didn't hand out NINJA loans to people with no money and no jobs like the US did and we didn't hand out low interest teaser rates that shot up to 5-7% after 9 months, again like the US.  The Canadian banks are much more liquid and transparent than any US bank, and most of the mortgages they own have been sold off to decrease risks.

 

I foresee a price correction of around 30%, maybe more, on single detached homes over the next 6-9 months.  That to me is worst case scenario.  If those lawsuits have legs then that could create alot of instability which could flatten out the market for awhile.  But something crazy would need to happen in order for BC to experience a US style market crash and have Mr. Clarkson's predictions come to fruition.

Edited September 21, 2016 by Harvey Spector

[taxi]

9 minutes ago, Harvey Spector said:

You missed this part:

 

Speaking to a sold-out audience at the Urban Development Institute’s Foreign Buyer Tax luncheon and panel debate September 16, Helmut Pastrick, chief economist at Central 1 Credit Union, said that he expects house prices to recover so that they are higher this time next year than they are today.

 

It wasn't just a hang out party with Polygon.  Also, you didn't show Davidoff (the unbiased guy's) full quote:

 

He said, “A potential collapse in foreign buyer demand… could result in a less-bad version of what happened in the United States [in the sub-prime crisis of 2008]. There is a significant risk of an over-correction in prices – but I wouldn’t say that is the most likely outcome.”

 

Also, the foreign buyers tax in Hong Kong was instituted in 2012, the market continued to rise after that so what the economist said is factually correct.  The fact that the real market in Hong Kong is in free fall 4 years later has no relation to the 4 year old tax, but is related moreso to what is happening now in the region.  

 

Nobody other than God knows what is going to happen really.  You have different economists giving different opinions, different lawyers giving different opinions, we even have a guy on this site in another thread who's predicting the end of the modern world with 20 year old flow charts and NASDAQ charts from 15 years ago.  

 

The economist did predict sales to drop another 35% this month which is likely going to happen and did say prices will fall over the next 3-6 months, which is exactly what I have been saying for the last month.  A 30% price correction isn't out of the question, which would basically bring us back to last year's prices.  Even a 40% drop brings us back to early 2014 prices.

 

The reality of the situation is this:  Even if we have a 40% price correction on single family detached homes bringing the median price in East Vancouver to around $960,000, the fact of the matter is that price is still unaffordable for the average or even above average working local Vancouverite.  So if prices fall 40% and then stabilize most people still won't be able to afford to buy a house in the City, which is what alot of people around here are saying.  

 

The days of a house in East Vancouver being worth $500,000, or even $700,000, are over.  Those days are gone and will never come back.  Even with a free fall in prices over the next year or two, the affordability issue in Vancouver will still be front and centre.  No amount of foreign buyers tax or any other type of taxes will get us back to prices from 7 years ago.  The last time a median price for a house in East Vancouver was $700,000 was exactly 7 years ago this month.  Only a complete economic collapse of the BC and Canadian economy worse than the US sub-prime crisis could ever bring us back to those prices.

 

I even read in the other thread about how CMHC was going to go bankrupt, by the same guy posting all the flow charts.  If CMHC only insures properties valued up to $1 million, which accounts for around 1% of all detached homes in the City, how is it possible they could ever go bankrupt?  99% of all homes in the "tax" zone have at least 20% equity in them if not alot more. We didn't hand out NINJA loans to people with no money and no jobs like the US did and we didn't hand out low interest teaser rates that shot up to 5-7% after 9 months, again like the US.  The Canadian banks are much more liquid and transparent than any US bank, and most of the mortgages they own have been sold off to decrease risks.

 

I foresee a price correction of around 30%, maybe more, on single detached homes over the next 6-9 months.  That to me is worst case scenario.  If those lawsuits have legs then that could create alot of instability which could flatten out the market for awhile.  But something crazy would need to happen in order for BC to experience a US style market crash and have Mr. Clarkson's predictions come to fruition.

Agreed that no one knows what will happen.

 

My point is that having a bunch of real estate professionals declaring themselves experts and then re-affirming to each other that prices will be higher next year is hardly proof of anything. 

[Rush17]

23 minutes ago, taxi said:

Agreed that no one knows what will happen.

 

My point is that having a bunch of real estate professionals declaring themselves experts and then re-affirming to each other that prices will be higher next year is hardly proof of anything. 

Wishful thinking perhaps!  Gotta rake in that cash!  The realtors on here seem pretty cool but I'm sure many others just want your $$.

[taxi]

32 minutes ago, Rush17 said:

Wishful thinking perhaps!  Gotta rake in that cash!  The realtors on here seem pretty cool but I'm sure many others just want your $$.

If they start telling people that things will go down 20% in a year....people will wait a year to buy, which is the opposite of what they want. Whether it's willful blindness or purposeful deceit, the real estate industry, as a whole, will never give you an honest answer. 

[Harvey Spector]

3 hours ago, taxi said:

If they start telling people that things will go down 20% in a year....people will wait a year to buy, which is the opposite of what they want. Whether it's willful blindness or purposeful deceit, the real estate industry, as a whole, will never give you an honest answer. 

I trust lawyers about the same as I trust realtors...  

[Realtor Rod]

So it was 8.8% of buyers were foreign from June to the end of August. 

 

9% in Vancouver. Some were predicting 50%. After this data, prices are going up in the new year, if I was a betting man.

[taxi]

1 hour ago, Realtor Rod said:

So it was 8.8% of buyers were foreign from June to the end of August. 

 

9% in Vancouver. Some were predicting 50%. After this data, prices are going up in the new year, if I was a betting man.

The tax came into effect on August 2nd, so including numbers since the announcement of the tax is obviously going to skew things down.

 

The data I saw says 13.2 in metro Vancouver from June 10 to August 1, and then 0.9 after that. That's for metro Vancouver. The foreign buyers have a preference for Richmond, Burnaby, and Vancouver proper. Also keep in mind this is people who are reported as foreign. The true numbers may be higher.

[Harvey Spector]

2 hours ago, Realtor Rod said:

So it was 8.8% of buyers were foreign from June to the end of August. 

 

9% in Vancouver. Some were predicting 50%. After this data, prices are going up in the new year, if I was a betting man.

Of course you will say that you are a Realtor...  

[Harvey Spector]

New sales figures show dramatic drop after B.C. foreign buyer tax

VICTORIA – The number of foreign buyers purchasing real estate in British Columbia dropped dramatically after the government instituted a 15 per cent foreign buyer tax on Aug. 2, new figures show.

But Premier Christy Clark says that was always supposed to be the intended effect, and “if it’s had an impact I’m glad about that because that’s what we wanted to do.”

The Ministry of Finance figures released Thursday show an almost total collapse in the foreign buyer real estate purchases in Metro Vancouver, from 1,974 sales valued at $2.3 billion during June 10-Aug.1, to only 60 sales worth a total of $46.9 million. The $46.9 million is the value of all real estate deals involving a foreign citizen (including partial ownership arrangements with Canadians), and of that only $17 million was the amount of foreign ownership subject to the foreign buyer tax.

The data suggests an almost 97 per cent drop in the number of foreign buyers in Metro Vancouver after the tax came into effect. 

The time periods are not directly comparable in terms of the number of days, but were the only figures provided by the government on Thursday.

“It’s fair to say we have had an impact,” Clark said in Kelowna. “That was the impact we wanted to have.”

She said the real estate affordability issue is “a multi-pronged problem” that can’t be solved with the foreign buyer tax alone.

“The federal government needs to step up in making more land available for development and municipal governments to be there on supply,” she said.

“But we started with the foreign tax, it’s had an impact, and my hope is that many of those units that might have otherwise sold to foreign buyers will be open for British Columbians to buy, because we want to put British Columbians first”

The premier cautioned that it was too soon to gauge the true impact of the tax, because the land title registry showed a massive rush to close real estate deals before the tax deadline on Aug. 2.

On July 29, the government said more than $850 million in residential property deals involving foreigners were recorded, which was equal to more than 55 per cent of all sales in Metro Vancouver on that day, and the equivalent of almost 40 per cent of the total amount of foreign deals since June 10.

“I think August most people will look back and say it was an unusual month because people moved their transactions into July to avoid it,” said Clark.

“But they won’t have that option for September, October, November, December. So I think we’ll start to see it normalize a bit. But if it’s had a dramatic impact, that’s what British Columbians want.”

Clark’s popularity has spiked since her government instituted the foreign buyer tax, a new report from the Angus Reid Institute showed Thursday.

The government data included a Lower Mainland breakdown of foreign buyer sales, for the same periods of June 10-Aug.1 versus Aug. 2-31:

• In Vancouver, foreign sales fell from 508 to 14. The value of those foreign deals fell from $733 million to $11 million.
• In Richmond, foreign sales fell from 310 to 10. The value of those foreign deals fell from $335 million to $6.4 million.
• In Surrey, foreign sales fell from 318 to 10. The value of those foreign deals fell from $312 million to $6.7 million.
• In Burnaby, foreign sales fell from 262 to 5. The value of those foreign deals fell from $221 million to $2.1 million.

The government said its auditors are now reviewing the deals to see if they were structured to avoid taxes.

[Harvey Spector]

Ontario Premier Wynne not sold on taxing foreign homebuyers

Ontario Premier Kathleen Wynne says she is keeping a close eye on how British Columbia is aiming to cool its hot housing market, but remains unconvinced that a tax on foreign buyers is the right move for her province. 

“We haven’t been advised by people in the province – either in the real estate sector or other sectors – that there is exactly the same issue [in Ontario]… and that the remedies would be exactly the same here,” Wynne told BNN in an interview on Wednesday.

A growing number of voices are pointing to inflated home prices as a risk for Canada’s economy. The Organisation for Economic Co-operation and Development cut its outlook for Canada’s economy on Wednesday and issued a new warning on the housing market. 

Earlier this week, CIBC Deputy Chief Economist Benjamin Tal issued a report predicting Ontario would have no choice but to implement a surcharge on foreign investment in the real estate sector. And a recent report from Sotheby’s International Realty warned there are “hints of newly redirected interest from international investors” in Toronto as a result of the B.C. tax. 

Wynne expects the provinces will address housing at the next premiers’ meeting.  

“There is a national discussion here made obvious by the fact that what happens in one province may have a significant impact in another,” she said.

[Harvey Spector]

Toronto luxury home sales heating up as B.C. tax diverts foreign buyers: Sotheby's

Toronto’s housing market should brace for more interest from foreign buyers, as the effect of British Columbia’s property tax on foreign nationals takes hold and pushes investors to look beyond Vancouver, according to a new forecast by Sotheby’s International Realty Canada.

“Hints of newly redirected interest from international investors following the introduction of Vancouver’s foreign buyer tax have been observed by industry observers, and is expected to gain traction in the fall, particularly within the top-­tier single family home market,” the report, released  Wednesday by the real estate sales company, said.  

Of the country’s four key metropolitan markets – Vancouver, Toronto, Montreal and Calgary – the Greater Toronto Area is expected to show the strongest gains and price increases, driven by consumer demand, consumer confidence in the financial returns of home ownership and “escalating interest from foreign buyers,” according to the report.

Brad Henderson, President and CEO of Sotheby’ International Realty Canada told BNN in an interview on Wednesday that the increased interest in Toronto real estate has been "pretty much a natural reflection of where investors would go given that there’s an external factor."

He predicted last month that the foreign buyers’ tax would start to impact other markets.

"Certainly I think Toronto and potentially other markets like Montreal will start to become more attractive, because comparatively speaking they will be less expensive," he said.

The report also said the GTA is “positioned to lead Canada in $1 million-­plus residential real estate sales” this fall.

A record number of homes were sold in the GTA last month even though listings continued to dwindle, according to the Toronto Real Estate Board.

TREB said its members had 9,813 sales in August, a 23.5-per-cent increase from the same month last year, though there were two more working days this year. The average home price, regardless of property type, rose 17.7 per cent to $710,410. Detached homes in the city of Toronto proper cost on average $1.2 million, up 18.3 per cent.

In Vancouver, where the 15-per-cent foreign buyers’ tax came into effect Aug. 2 in attempt to cool the housing market, more “normalized fall market behaviour” is expected, Sotheby’s said.

Home sales in the city have plunged since the tax was introduced, according to the Real Estate Board of Greater Vancouver, falling 26 per cent in August compared to the same month last year.

But even with the new tax slower home sales, Sotheby’s predicts that affordability will remain a “critical concern” in Vancouver.    

The Sotheby’s report was based on information collected from MLS boards across Canada.

[Realtor Rod]

32 minutes ago, Harvey Spector said:

New sales figures show dramatic drop after B.C. foreign buyer tax

VICTORIA – The number of foreign buyers purchasing real estate in British Columbia dropped dramatically after the government instituted a 15 per cent foreign buyer tax on Aug. 2, new figures show.

But Premier Christy Clark says that was always supposed to be the intended effect, and “if it’s had an impact I’m glad about that because that’s what we wanted to do.”

The Ministry of Finance figures released Thursday show an almost total collapse in the foreign buyer real estate purchases in Metro Vancouver, from 1,974 sales valued at $2.3 billion during June 10-Aug.1, to only 60 sales worth a total of $46.9 million. The $46.9 million is the value of all real estate deals involving a foreign citizen (including partial ownership arrangements with Canadians), and of that only $17 million was the amount of foreign ownership subject to the foreign buyer tax.

The data suggests an almost 97 per cent drop in the number of foreign buyers in Metro Vancouver after the tax came into effect. 

The time periods are not directly comparable in terms of the number of days, but were the only figures provided by the government on Thursday.

“It’s fair to say we have had an impact,” Clark said in Kelowna. “That was the impact we wanted to have.”

She said the real estate affordability issue is “a multi-pronged problem” that can’t be solved with the foreign buyer tax alone.

“The federal government needs to step up in making more land available for development and municipal governments to be there on supply,” she said.

“But we started with the foreign tax, it’s had an impact, and my hope is that many of those units that might have otherwise sold to foreign buyers will be open for British Columbians to buy, because we want to put British Columbians first”

The premier cautioned that it was too soon to gauge the true impact of the tax, because the land title registry showed a massive rush to close real estate deals before the tax deadline on Aug. 2.

On July 29, the government said more than $850 million in residential property deals involving foreigners were recorded, which was equal to more than 55 per cent of all sales in Metro Vancouver on that day, and the equivalent of almost 40 per cent of the total amount of foreign deals since June 10.

“I think August most people will look back and say it was an unusual month because people moved their transactions into July to avoid it,” said Clark.

“But they won’t have that option for September, October, November, December. So I think we’ll start to see it normalize a bit. But if it’s had a dramatic impact, that’s what British Columbians want.”

Clark’s popularity has spiked since her government instituted the foreign buyer tax, a new report from the Angus Reid Institute showed Thursday.

The government data included a Lower Mainland breakdown of foreign buyer sales, for the same periods of June 10-Aug.1 versus Aug. 2-31:

• In Vancouver, foreign sales fell from 508 to 14. The value of those foreign deals fell from $733 million to $11 million.
• In Richmond, foreign sales fell from 310 to 10. The value of those foreign deals fell from $335 million to $6.4 million.
• In Surrey, foreign sales fell from 318 to 10. The value of those foreign deals fell from $312 million to $6.7 million.
• In Burnaby, foreign sales fell from 262 to 5. The value of those foreign deals fell from $221 million to $2.1 million.

The government said its auditors are now reviewing the deals to see if they were structured to avoid taxes.

Hmm, wants to put BCers first, eliminate the PPT for BCers then... *crickets*

[Harvey Spector]

3 minutes ago, Realtor Rod said:

Hmm, wants to put BCers first, eliminate the PPT for BCers then... *crickets*

If she eliminates the PTT which is her number one source of revenue her surplus would turn into a deficit and she would certainly lose the next election.  The day the government eliminates the PTT is the day we are six feet under, meaning we will never see it.

 

Income taxes and the PTT were only supposed to be SHORT term fixes.  Income taxes, introduced as a short term fix in 1917 as a temporary measure because of WWI, are now approaching their 100th year of operation.  The PTT (PPT), introduced in 1987 to avoid tax speculation and wealth on the "higher" end homes, is now approaching its 30th year of operation.

 

Why not increase the threshold on the PTT?  When it was introduced in 1987 the average price of a house was less than $150,000.  95% of homes at the time were below the $200,000 threshold, so only 5% of homes were getting taxed at the 2% mark. Now EVERY house is getting taxed at 2% since all homes are priced over $200,000.  So they should be RAISING the threshold of that first 1% to over $1 million at the very least.  Of course that will never happen as it would eat into all their profits.

 

 

[Rush17]

23 minutes ago, Harvey Spector said:

If she eliminates the PTT which is her number one source of revenue her surplus would turn into a deficit and she would certainly lose the next election.  The day the government eliminates the PTT is the day we are six feet under, meaning we will never see it.

 

Income taxes and the PTT were only supposed to be SHORT term fixes.  Income taxes, introduced as a short term fix in 1917 as a temporary measure because of WWI, are now approaching their 100th year of operation.  The PTT (PPT), introduced in 1987 to avoid tax speculation and wealth on the "higher" end homes, is now approaching its 30th year of operation.

 

Why not increase the threshold on the PTT?  When it was introduced in 1987 the average price of a house was less than $150,000.  95% of homes at the time were below the $200,000 threshold, so only 5% of homes were getting taxed at the 2% mark. Now EVERY house is getting taxed at 2% since all homes are priced over $200,000.  So they should be RAISING the threshold of that first 1% to over $1 million at the very least.  Of course that will never happen as it would eat into all their profits.

 

 

Your argument makes sense.  They should scale it up too todays standards.  I guess they are kind of doing that with MSP Premium's but I'm sure housing is where they get their bread and butter.  

 

More ppl on MSP Premiums but the dollar amounts on homes is much higher right?  yeah.