B.C.’s experience shows problem not big enough to move markets
included in Thursday’s federal budget plan, comes years after some provinces already hit foreign buyers with substantial property purchase taxes. The federal ban now will do little to cool the housing market, British Columbia’s minister of housing predicts, and to temper it, some critics are calling for increased regulation of the arena more broadly.
B.C. sought to tackle its superheated real estate market in 2016, when it imposed a 15-per-cent foreign buyer tax on residential real estate deals in Metro Vancouver. When then-premier Christy Clark first introduced the foreign buyers’ tax, housing prices had hit record highs and housing affordability was becoming a political football. “There is evidence now that suggests that very wealthy foreign buyers have raised the price, the overall price of housing for people in British Columbia,” Ms.
Instead of a ban, she said, Ottawa should address the distortion caused by Canadian homeowners who are purchasing second, third and fourth properties. Real Estate Investment Trusts are also corroding affordability on a larger scale than foreign buyers, she said, and should also be more strictly regulated. REITs are scooping up rental buildings across the country with the sole purpose of driving up rents and getting a higher return on these investments, she said.
Hafiz Rahman, an economics professor with Thompson Rivers University in Kamloops, B.C., said Statistics Canada pegs foreign buyers as representing five per cent of the overall market across the country, but banning them could still have an impact on prices in some larger cities.
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