File Photo – Canadian flags are seen on houses in the Vancouver suburb of Richmond. REUTERS/Chris Helgren
October 31, 2017
VANCOUVER (Reuters) – Foreign buyers have started inching back into the Vancouver housing market, more than a year after the province of British Columbia imposed a foreign buyer tax on real estate deals, according to government data released on Tuesday.
Foreign nationals were behind 5 percent of home purchases in Metro Vancouver in September, up from about 0.9 percent in August 2016, the month the 15 percent levy was enacted in response to offshore money flowing into the west coast city’s overheated housing market.
In the suburb of Richmond, home to Canada’s largest immigrant population, foreign buyers accounted for 10.8 percent of purchases in September, while in nearby Burnaby, foreign buyers were behind 9.6 percent of deals.
The numbers were still below those of July 2016, when more than 24 percent of home sales in both Burnaby and Richmond involved foreign nationals, as buyers scrambled to close to deals before the tax took effect.
British Columbia’s New Democratic government inherited the foreign buyer tax from the previous Liberal government, and Finance Minister Carole James has been reviewing the levy as part of a new strategy on housing affordability.
“I’m concerned about the role of foreign speculation in B.C.’s housing market. … All options are on the table as we look at the impact the tax has had on the housing market,” she said in a statement.
Sales of detached homes in the Vancouver area plunged sharply in the months after the foreign buyer tax was announced, with the market remaining tepid over the past year.
Condo sales, which are at a much lower price point than detached homes, rebounded more quickly and prices have jumped 21.7 percent in the past year.
(Reporting by Julie Gordon; Editing by Peter Cooney)