A new survey finds that the vast majority of British Columbians are supportive of implementing new government interventionist policies that restrict most foreigners from acquiring real estate.
According to Research Co., such a legislation that bans foreigners from acquiring real estate would be similar to the 2018-enacted ban in New Zealand, where foreign buyers were also blamed for driving up housing prices.
Exceptions to the highly touted New Zealand policy include foreigners who hold residency status, as well as citizens from Australia and Singapore due to free trade agreements. Despite the attention the ban has received, numerous media reports in New Zealand over the years indicate the ban has moderated the country’s housing market, especially for upscale homes, but prices remain high due to fundamentals, especially in Auckland.
Prior to the ban, foreign buyers accounted for just 3% of New Zealand’s real estate activity. BC government data shows a similar proportion for residential sales in the province in 2018.
The survey shows that the highest level of support for such a ban are residents of Vancouver Island and younger generations ages 35 to 54, with each of these cohorts voicing 88% in favour.
In British Columbia and Ontario, foreign buyers taxes have been enacted by the governments in each province, which has slowed down the housing markets considerably in the Vancouver and Toronto regions over the last three to four years. Within Metro Vancouver, this interventionist policy has particularly affected the luxury segment of the residential real estate market.
BC residents agree with the 2018 decision to increase the foreign buyers tax from 15% to 20% and to expand the foreign buyers tax to areas beyond Metro Vancouver, with 79% indicating this position.
There are also similarly high proportions of British Columbians agreeing with the implementation of the speculation tax targeting foreign and domestic homeowners who pay little or no income tax in the province, and those who own second properties that are not long-term rentals (77%).
Furthermore, 76% support the new tax of 0.2% on the value of homes between $3 million and $4 million, and the tax rate of 0.4% on the portion of a home’s value that exceeds $4 million.
As well, 72% of residents agree with the decision to increase the property transfer tax from 3% to 5% for homes worth more than $3 million.
With all that said, nearly six-in-10 BC residents (57%) think the provincial government’s current policies will be “effective” in shifting the housing market towards more affordable conditions, representing an 8% increase from a survey conducted in late 2019.
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
