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BC Introduces New 15% Foreign Buyers Tax - Update: Student Files Class Action Lawsuit


DonLever

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The usual hatred for the Christy Clark and the Liberals is out there again.   If the Liberals do nothing they get blamed.  If they do something get blamed. 

 

If the NDP were in power the same the thing with the real estate markets will occur.  There is very little any government, right or left, can do with a hot real estate market.

 

So what if the prices drop 10%, most people can't afford $1 million dollar for a home.

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18 minutes ago, Realtor Rod said:

*sigh* Is the BC population this dense to not see what is really happening here  (besides nothing)?

 

She is pandering for votes using the hot button topic of the day. 

OMG who do I trust? The politician looking for votes or the resident realtor who continually assures us all there is no way prices can drop and we'd better buy now. 

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17 minutes ago, DonLever said:

The usual hatred for the Christy Clark and the Liberals is out there again.   If the Liberals do nothing they get blamed.  If they do something get blamed. 

 

If the NDP were in power the same the thing with the real estate markets will occur.  There is very little any government, right or left, can do with a hot real estate market.

 

So what if the prices drop 10%, most people can't afford $1 million dollar for a home.

Clark should have done something at least 2 years ago.

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15 minutes ago, taxi said:

Clark should have done something at least 2 years ago.

Possibly but my main point is no government regardless of political stripe can do much in a runaway housing market.  Other countries like Australia are trying to restrict foreign home ownership to cool the housing market but has it worked?  Prices in Australia has not dropped much.

 

As I said, there are other factors beside foreign ownership causing housing prices to go up.  Just going after foreign ownership won't solve the problem.

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28 minutes ago, DonLever said:

Possibly but my main point is no government regardless of political stripe can do much in a runaway housing market.  Other countries like Australia are trying to restrict foreign home ownership to cool the housing market but has it worked?  Prices in Australia has not dropped much.

 

As I said, there are other factors beside foreign ownership causing housing prices to go up.  Just going after foreign ownership won't solve the problem.

Fair enough. It's really a global problem. 

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2 hours ago, taxi said:

OMG who do I trust? The politician looking for votes or the resident realtor who continually assures us all there is no way prices can drop and we'd better buy now. 

Who have I ever assured the prices wouldn't drop? 

 

By the way, here are the average prices since 1977, tell me where prices really dropped (if I was one of those realtor's). All my clients trust me.

 

January-1977-to-2016-REBGV-Price-Chart-M

 

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I'll post this in two threads but here's a few things to consider.

 

1.  This is a framework for legislation.  Do not forget Clark just visited China with major industry insiders from BCREA.  Her Chinese counter also very silently visited her in the last 2 months.  There will be amendments because they'll claim it is so vague.  Lips service for a pre-election look tough platform.  From a party that promised us a trillion dollar LNG fund and hundreds of thousands of jobs in action by 2017 *crickets*

 

Guess they triple deleted that particular item from their old platform

 

2.  10% or 15% or even 25% let's be honest.  These are people purchasing literal closets and run down shacks for million(s) of dollars.  Adding a small percentage is not going to dissuade them.  If they cannot find a loophole they will simply make the purchase anyways.  Care to guess what will happen to the market when a 2 bedroom house hits a market for say $1.4 million, immediately gets bid up to say $1.75 million, and then is bought with a 15% mark up?  An already unaffordable market will literally jump 10-15 percent over night.

 

This is a literal token, lip service attempt at reigning things in.  Don't forget this will only flood this issue even further out of the lower mainland towards Hope and will start to seriously affect Victoria as well as Kelowna.  10-15 percent increase in prices in a matter of weeks or months.  This is without even factoring in the fact that the majority of MPs and MLA's from the province own property in and around vancouver and at no point in history has a politician deliberately set out to decrease their own personal wealth.

 

A lot of people are very hesitant to accept this as anything but tough talk until a genuine provincial and federal plan is laid out.  And for very good reasons.

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3 hours ago, Realtor Rod said:

Who have I ever assured the prices wouldn't drop? 

 

By the way, here are the average prices since 1977, tell me where prices really dropped (if I was one of those realtor's). All my clients trust me.

 

January-1977-to-2016-REBGV-Price-Chart-M

 

In 1981 you had almost a 40% drop. It's hard to see it on the chart you've provided, but it's there. The prices go from about 200k to what looks like around 130k. Just prior to that prices also accelerated quickly. Kind of like they have over the last 10 years. The only thing that's never happened before is the giant spike we've just had. We've actually had 3 of them in a row. That's what's unheard of.

 

Once again, I'm not saying that a crash definitely will happen, but there are plenty of experts out there saying it is likely.

 

I'm curious what you think it is about Vancouver that makes it special?

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45 minutes ago, Warhippy said:

I'll post this in two threads but here's a few things to consider.

 

1.  This is a framework for legislation.  Do not forget Clark just visited China with major industry insiders from BCREA.  Her Chinese counter also very silently visited her in the last 2 months.  There will be amendments because they'll claim it is so vague.  Lips service for a pre-election look tough platform.  From a party that promised us a trillion dollar LNG fund and hundreds of thousands of jobs in action by 2017 *crickets*

 

Guess they triple deleted that particular item from their old platform

 

2.  10% or 15% or even 25% let's be honest.  These are people purchasing literal closets and run down shacks for million(s) of dollars.  Adding a small percentage is not going to dissuade them.  If they cannot find a loophole they will simply make the purchase anyways.  Care to guess what will happen to the market when a 2 bedroom house hits a market for say $1.4 million, immediately gets bid up to say $1.75 million, and then is bought with a 15% mark up?  An already unaffordable market will literally jump 10-15 percent over night.

 

This is a literal token, lip service attempt at reigning things in.  Don't forget this will only flood this issue even further out of the lower mainland towards Hope and will start to seriously affect Victoria as well as Kelowna.  10-15 percent increase in prices in a matter of weeks or months.  This is without even factoring in the fact that the majority of MPs and MLA's from the province own property in and around vancouver and at no point in history has a politician deliberately set out to decrease their own personal wealth.

 

A lot of people are very hesitant to accept this as anything but tough talk until a genuine provincial and federal plan is laid out.  And for very good reasons.

The Chinese government does not like its citizens pulling money out of the economy and putting it into speculative real estate markets.

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Realtors are not happy (from CKNW):

 

Quote

 

The president of the Real Estate Board of Greater Vancouver says there was no warning and no consultation by the province that a tax on foreign buyers was coming.

“The only people calling me more than the media today are realtors upset about this because they’ve got clients that are B.C. residents and voters that are going to get hit hard by this if their transactions aren’t exempt.”

Dan Morrison says a key issue is current transactions that are in the process of closing, which will be subject to the new tax, something he says will could bring short-term volatility.

“These transactions are going to be hit, and to use the price point that the government used in their press release, if it’s a $2-million transaction, all of a sudden there’s an extra $300,000 that’s due.”

 

 

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8 hours ago, Realtor Rod said:

*sigh* Is the BC population this dense to not see what is really happening here  (besides nothing)?

 

She is pandering for votes using the hot button topic of the day. 

No kidding. With Bob Rennie by her side she will win the next election quite easily. Wait until the tax bill is announced right before election time. "Yes we collected $5 billion from the new foreign buyers tax, which will be put into a fund to develop low income rental units and more rentals for the middle class".

 

This is merely a stop gap initiative. It's not gonna tank the market, or even stop it. Why doesn't the govt. actually change the city bylaws to allow more rezoning of land for duplexes and condos and quicker turn around times for high rise developments so we can add inventory, and lots of it, to this market. The sales to active ratio, even after last month, is still 59%. That's still crazy high. It has to get below 20% before you even have a price correction of any kind. The only way to do that is to increase supply 10 fold. 

 

Putting another tax on foreign ownership is a start, but is just a band aid solution. I'm waiting for the big guns to come out so my first time home buyers can actually afford to buy a property anywhere west of Chilliwack. 

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1 hour ago, taxi said:

In 1981 you had almost a 40% drop. It's hard to see it on the chart you've provided, but it's there. The prices go from about 200k to what looks like around 130k. Just prior to that prices also accelerated quickly. Kind of like they have over the last 10 years. The only thing that's never happened before is the giant spike we've just had. We've actually had 3 of them in a row. That's what's unheard of.

 

Once again, I'm not saying that a crash definitely will happen, but there are plenty of experts out there saying it is likely.

 

I'm curious what you think it is about Vancouver that makes it special?

Do you remember what interest rates were in 1981? 20% for a lot of people. If that happens, yes, there will be a drop in price and a LOT of foreclosures. 

 

I didn't see your last part about special. Entrenched diversity. Great schools. Beautiful scenery. There is a lot more but I am tired. 

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1 hour ago, taxi said:

In 1981 you had almost a 40% drop. It's hard to see it on the chart you've provided, but it's there. The prices go from about 200k to what looks like around 130k. Just prior to that prices also accelerated quickly. Kind of like they have over the last 10 years. The only thing that's never happened before is the giant spike we've just had. We've actually had 3 of them in a row. That's what's unheard of.

 

Once again, I'm not saying that a crash definitely will happen, but there are plenty of experts out there saying it is likely.

 

I'm curious what you think it is about Vancouver that makes it special?

In 1981 interest rates were 21%. That kinda had an effect on the tanking of the market. 

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1 hour ago, DonLever said:

Realtors are not happy (from CKNW):

 

 

I work Mission, Abbotsford and Chilliwack mostly. We are exempt. However, my good friends in Vancouver have said there are transactions collapsing like crazy right now because of your quoted post. Next, those sellers are going to be livid. 

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1 hour ago, DonLever said:

Realtors are not happy (from CKNW):

 

 

Well in all fairness there are transactions that have already been closed, i.e. subjects removed, and the completion dates are obviuolsy past August 1, so it isn't really fair for those people to have to pay an extra $300k simply because the govt. changed the law without telling anyone and not allowing those specific transactions to close and be exempt. Kinda dumb really.  Christy must be really desperate for votes right now to put through this legislation so quickly that she didn't even have time to call the President of the Real Estate Board before it went down. 

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A realtor friend just called me to say her 1.4 million dollar deal has to move dates up to end of July for PTT. I have heard of over a dozen deals going sideways that were already firm. The courts are going to get busy as people fight over deposits.

 

Imagine if you had a deal in May to sell your home. It was scheduled to close in mid August. You then bought a new home for that time and put 75k down. Suddenly, your foreign buyer says we can't afford to complete with the advanced PTT and we are collapsing. Now, you have no deal, you have to fight for that deposit and you will have to fight to keep your own with no guarantees.  

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1 minute ago, Harvey Spector said:

Well in all fairness there are transactions that have already been closed, i.e. subjects removed, and the completion dates are obviuolsy past August 1, so it isn't really fair for those people to have to pay an extra $300k simply because the govt. changed the law without telling anyone and not allowing those specific transactions to close and be exempt. Kinda dumb really.  Christy must be really desperate for votes right now to put through this legislation so quickly that she didn't even have time to call the President of the Real Estate Board before it went down. 

It's criminal. As a seller, who could lose my deal I would be pissed. Why not implement in November, or grandfather. It doesn't make any sense. 

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7 minutes ago, Realtor Rod said:

I work Mission, Abbotsford and Chilliwack mostly. We are exempt. However, my good friends in Vancouver have said there are transactions collapsing like crazy right now because of your quoted post. Next, those sellers are going to be livid. 

This is great news for Christy. If the market does tank, or at least correct in the next 6 months, she is guaranteed to get re-elected because she will say it is all because of her actions and changes. Once she gets re-elected she won't care what happens afterwards. 

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