Analysis: Vancouver Housing Affordability Worsens Despite Foreign Buyer Tax
"Metro Vancouver's housing market hasn't substantially improved since a regional 15 per cent foreign buyers tax was implemented in August 2016," reports Justin McElroy. The analysis stands in contrast to initial reports after the new foreign buyers tax went into effect last year.
McElroy is providing analysis of data provided by the Real Estate Board of Greater Vancouver, with commentary provided by a pair of professors from the University of British Columbia's Sauder School of Business.
The analysis takes a wide-ranging approach to the data—from home prices (which have crept back up to pre-foreign buyers tax after an initial drop) to apartment prices (which have been consistently growing, despite the tax), suburban prices (where apartment and house prices paused briefly after the law went into effect, but then continued to rise steadily), housing activity (up significantly over 2016), and foreign buyers (increasing steadily after an initial drop following the new tax).
The data seem to make a case that the foreign buyers tax did not solve the fundamental problems of the Vancouver housing market—a case that has also been made this year by Dan Bertolet. In McElroy's article, Tsur Sommerville, a professor at UBC's Sauder School of Business, cautions against over-interpreting the data, but also suggests that Vancouver policy makers might need to target more effective taxes to have an effect on the housing market.