Shutting the door to foreign ownership of residential properties will have little impact on housing prices on the North Shore, local Realtors say, because the government is making the move about a decade too late.
“Everyone blames the foreign buyers” for skyrocketing housing prices, said Calvin Lindberg, a West Vancouver real estate agent with Angell Hasman & Associates. Foreign buyers are a convenient boogeyman, said Lindberg, “People want to see governments do something” about the current housing crisis, he said.
Starting with the introduction of the provincial foreign buyers tax in 2016, foreigners have played a much less prominent role in local real estate and disappeared almost entirely during the COVID-19 pandemic, he said.
Brent Eilers, a Realtor with ReMax Masters Realty in West Vancouver had a similar take.
“The first reaction I have is fantastic. Just where the hell were you 20 years ago?” he said.
It’s a similar scenario to the provincial beneficial home-ownership registry brought in years after the peak of buying and selling through proxies and “shadow flipping” of properties, he said.
“I think it’s a good idea, but it’s a typical political manoeuvre,” said Eilers. “I don’t think it’s going to make that much difference in our real estate market.”
The new measures also won’t impact foreigners who already own property in Canada.
According to recent government figures, about nine per cent of homes in West Vancouver have some kind of foreign ownership (including those owned by foreigners, satellite families, corporations, trusts and those with mixed types of ownership). Previously, SFU researcher Andy Yan put that figure slightly higher, estimating foreigners own 12.7 per cent of single-family homes in West Vancouver.
In the District of North Vancouver, foreign owners own about 922 properties out of 27,855 residential properties.
In the City of North Vancouver, foreign owners owned about 1,062 city properties.
Currently local buyers are the ones driving up house prices, said both Lindberg and Eilers. “The runaway train we’ve been on for the last two or three years has been caused by lack of inventory,” said Eilers.
Lindberg notes that real estate sales in 2021 – one of the “biggest years we’ve had in the past 10 years” – was fuelled entirely by local buyers.
After last year’s runaway market, this spring “It’s definitely cooling,” said Lindberg. Sales for the first three months of 2022 on the North Shore are down about 30 per cent from the same time period last year, said Lindberg.
Eilers said he’s still seeing activity in sales of homes priced under $2 million. On the North Shore, however, that rarely includes any single-family detached homes.
Figures from the Real Estate Board of Greater Vancouver showed the “benchmark” price for a detached home in North Vancouver in March was $2.3 million – up over 20 per cent from March 2021 – while the price of a West Vancouver home was $3 million. Condos in North Vancouver were selling for $850,000.
Lack of inventory has driven prices up, he said.
Among other measures the federal government announced last Thursday (April 7) to address the housing crisis, were a tax-free home savings account, additional first-time home buyers’ credits and a fund aimed at assisting municipalities to cut red tape to speed up housing developments.
Finance Minister Chrystia Freeland warned, however, there is no “silver bullet” that will fix the housing crisis.
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.
