British Columbia Finance Minister Mike de Jong, in delivering the province’s budget, said the government would start asking property buyers whether they were a citizen or a permanent resident and, if not, where they were from.
This pledge to collect more data on home buyers was the result of ongoing debate regarding the lack of hard facts on foreign ownership in Vancouver’s property market. Unfortunately the plan is already being criticized for failing to truly capture the impact of global capital on local real estate prices.
Vancouver is home to a burgeoning property market where the average price of a detached house in January reached $2.87-million, up by almost 46 per cent from January 2015. Some real estate firms say almost 70 per cent of detached houses with a value of over $3-million are going to buyers from China. Many young families including upper-middle-class professionals are unable to enter the housing market.
Vancouver has been engaged in a non-stop debate about the role of foreign money in the city’s increasingly pricey housing market and the impact that could have on the future of the city. The issue has even attracted the attention of Prime Minister Justin Trudeau, who has pointed out the need for more data.
Despite Vancouver mayor Gregor Robertson having asked B.C. Premier Christy Clark’s government to intervene in the housing market, Ms. Clark and Mr. de Jong have maintained they would not enforce policies that could have a negative impact on house prices.
Mr. de Jong said that while he won’t try to predict what the data will show, his aim is not to discourage foreign investors.
“There is a diversity of opinion about the degree to which foreign investment in the market is driving prices,” Mr. de Jong said. “The value in the market has increased to a degree and with a speed that is registering on people. But it’s not true that there are no housing options for residents.”
Vancouver immigration lawyer Ryan Rosenberg says there is nothing wrong with foreign investment and that the government should be cautious about how closely it scrutinizes the roots of permanent residents. He also expressed doubts as to whether the new measures will have any impact and added that the government should instead ask buyers where they pay income tax – which would show where they earn their money.
Critics believe the new disclosure rules should also focus on the source of capital and not just target residency. The new measures fail to address soaring prices, and may one day make the situation much worse.
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