Tallest condos in toronto. How to break the skyrocketing house prices? To the Vancouver property market fell from heaven to hell. For the Canadian Ministry of Finance in British Columbia, the answer is to “tax foreign buyers”.Please Visit: Tallest condos in toronto to Get Your VVIP Registration Today!
At the end of July, the Daily Business News reported that the Ministry of Finance of BC Province announced new rules that would impose an additional 15 per cent housing transfer tax on overseas real estate investors from Aug. 2. the new tax is limited to the Greater Vancouver area, which has the largest number of foreign investors in BC province and Canada as a whole.
In July, BC province released its first “overseas buyer data” on the property market. Between June 10 and 29, investors from Chinese mainland accounted for 76.6 per cent of total home purchases by foreign investors, according to the data.
Earlier, house prices in Vancouver rose 2.3% in July, the 18th month in a row, and set a new record every month, up 24.3% from July last year, according to the National Bank of Canada.
The Bank of Canada also pointed out in its 2016 semi-annual report that demand from foreigners “has indeed led to a rise in house prices, which has led to a rise in home loans.”
Since house prices are speculated by foreign buyers, let’s tax them. As a result, there is the above “house transfer tax”. However, the “cooling” has become a “sudden freeze”.
According to Wall Street news, Canadian local media Global News mentioned in a report that real estate agents and the National Real Estate demand Network (MLS) data show that the Vancouver property market is undergoing a major adjustment, with prices and sales falling together.
Although August is the off-season of the property market, compared with the same period last year, property market sales can be described as “avalanche”. Real estate broker Brent Eilers counted only three homes for sale in west Vancouver from Aug. 1 to 14, compared with 52 in the same period last year, down 94% from a year earlier, according to MLS data.
With the exception of West Vancouver, sales in Richmond plummeted by 96%, while sales in North Bengnabi fell by 95%. Both the West side and the city of Gaochulin were hit. On average, property sales in the greater Vancouver area fell 85% in the first two weeks of August.
Bloomberg quoted Elton Ash, an executive at Re/Max Holdings Inc, a Canadian residential real estate brokerage, as saying that the new tax had suddenly cooled the market and that “there was basically no business to do”. Ash also pointed out that failed deals could have a “domino effect” that could endanger up to six subsequent transactions.
In terms of house prices, house prices, which continue to hit record highs, have also begun to loosen. The average home price in Vancouver is now $1.1 million, down 20.7 per cent in the past 28 days and 24.5 per cent in the past three months, according to Zolo, a Canadian real estate broker. House prices in Richmond have fallen 17.6% in the last 28 days and 20.7% in the past three months.
According to reports on Wall Street, real estate companies and brokers have said that transaction volume has fallen sharply, and overseas investors have chosen to give up buying houses instead of paying taxes. To make matters worse, local residents who are not affected by the new deal also choose to wait and see in anticipation of lower house prices, or even withdraw their home purchase contracts.
Some people in the industry have also pointed out that it is too early to judge whether the Vancouver property market will collapse or not. “it’s really hard to say whether the housing market has cooled down right now,” Global News reported. “you may need at least three months of complete data to judge.”
The “overseas buyer data” of the above-mentioned BC province mentioned that the number of foreign investors in the province accounts for only 3%, and the total investment accounts for only 5%, but this figure has been widely questioned by locals.
“3% should be Chinese buyers who have nothing to do with Canada, who buy houses for investment or vacation. In fact, many foreign buyers have local relationships, such as obtaining permanent residency or work visas and student visas, so that you will not be seen as non-resident overseas buyers. ” According to the 21st Century Economics report, Re/Max Holdings Inc, one of Canada’s largest residential real estate agencies. According to a survey conducted by the real estate agency in 2015, Chinese buyers own 30% of all types of homes in the Vancouver area, according to a former executive vice president.
According to Wall Street reports, Peter Rutledge, a financial analyst at the National Bank of Canada, said in a report that Chinese buyers spent C $12.7 billion (US $9.6 billion) on property in Vancouver last year, accounting for 33 per cent of total local property sales.
According to the 21st Century Business report, data published on the Canadian government website show that the Philippines, India and China have long been the top three sources of Canadian immigrants. From 2012 to the first quarter of 2016, nearly 100000 Chinese citizens have been granted permanent residence in Canada.
According to Chinanews.com, at the end of 2014, the number of Chinese students studying in Canada was as high as 110000, accounting for 1/3 of Canada’s total foreign student population and three times the number of the second Indian student. According to the 2015 Chinese returnee Development report released in July by the China and Globalization think tank, the least number of Chinese students studying in Canada returned home because many of them studied abroad for the purpose of emigration. These people are “invisible” buyers in the Canadian property market.
Although the “exclusive tax” has temporarily cooled the property market in Vancouver, Chinese buyers with Maple Leaf Card (Canadian permanent resident Card) have different views. “from the standpoint of permanent residents, I welcome this new policy,” one buyer told the 21st Century Economic report. I’m going to live in Vancouver. As a local resident, I don’t want house prices to soar. I want prices to maintain a stable and reasonable growth rate. I don’t want to see many speculators speculating in real estate and turn their neighborhood into an empty city. ”
Some analysts believe that although the new real estate policy in Vancouver keeps overseas investors out of Vancouver, other areas may rise rapidly and become destinations for overseas capital. After all, if one bubble bursts, other bubbles will stand up.