housing
LET’S TALK ABOUT THE 1.2%
Foreign buyers of residential real estate are once again in the sights of Canadian political parties. It’s a red herring.
Issues of housing costs and supply dominated conversations leading up to the recent federal election. And within this area of focus, multiple parties presented positions on foreign buyers and owners of residential real estate in Canada. For the Liberals, who have been returned to power with a minority government, they have indicated that they will ban foreign buyers for a period of two years. Regardless of both who is in power and how much power they have, there appears to be a strong appetite on the part of these two parties to effectively ban foreign property purchasers in Canada for the next couple of years.
To be sure, this is low-hanging political fruit, but its effect is likely to be minimal to nil. In Metro Vancouver (and other parts of BC) and in Greater Toronto there already exists a foreign buyer tax. The fact that a ban would eliminate the hundreds of millions of dollars the respective provincial governments collect in foreign buyer taxes notwithstanding, the data for Metro Vancouver show that only 1.2% of purchases are foreign buyers. A ban on these few-hundred purchasers will not significantly impact the market from an affordability and availability perspective.
CONTEXT FOR A FOREIGN BUYER BAN
4.5%
4.0%
3.5%
2020 total 837 FB PURCHASES
3.0%
2.5%
year-to-date 560 FB PURCHASES
2.0%
1.5%
1.2% 1.1%
1.0%
2019 total 765 FB PURCHASES
0.5%
0.0%
COUNT OF RESIDENTIAL PURCHASES
VALUE OF RESIDENTIAL PURCHASES
DATA: MONTHLY SHARE OF COUNT AND VOLUME OF RESIDENTIAL PROPERTY TRANSACTIONS WITH FOREIGN INVOLVEMENT, METRO VANCOUVER
SOURCE: BC GOVERNMENT PROPERTY TRANSFER TAX DATABASE
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