Foreign buyers have flocked to one of Vancouver’s most hotly anticipated housing developments, raising new questions about whether it’s time government intervened in the city’s increasingly unaffordable real estate market.
Vancouver House, a high-profile tower being erected near the foot of the Granville Street Bridge, is nearly sold out, and a full 35 per cent of units were purchased by foreign buyers.
It’s not an isolated case. Anson Realty said it’s seen a similar ratio of international purchasers on a number of condo projects it’s represented in recent years.
“There has been people from all over the world,” realtor Grace Kwok said. “Vancouver all of a sudden is a hot spot for them.”
Given long-brewing concerns that international investment is helping drive up prices in the region, some experts argue the government needs to take a more proactive approach to keeping home ownership within reach of locals.
University of British Columbia professor Dr. David Ley is working to compare the government’s approach to foreign ownership in Vancouver with four other major cities around the world: Hong Kong, Singapore, Sydney and London.
The task is difficult, Ley said, because the issue isn’t even being tracked here at home.
“We don’t have data, we don’t have policy. This is pretty unusual,” Ley said. “They are all taking action and we’re not.”
What some cities have done is go after high-priced properties with more burdensome taxes and other measures in an attempt to push down prices. The top end of the market drives the rest, Ley said, so targeting the priciest property purchases can have ripple effects.
Australia recently imposed fees on foreign investors, with threats of hefty fines or even jail time for those who break the rules.
“They’re doing it because of the impact that high prices and lack of affordability have on their own citizens. So there’s a public need and government are responding to that need,” Ley said.
Even the B.C. Chamber of Commerce has proposed the government increase the property transfer tax for foreigners while giving local buyers a break.
B.C. Housing Minister Rich Coleman dismissed the idea of provincial intervention, however, arguing it would be unfair to people who have already invested in housing, including locals.
“The real estate economy has been a free market economy for decades and people have made significant investments based on that,” Coleman said.
“And to go out and decide that we’re going to put those investments at risk for British Columbians and folks that own property in B.C. doesn’t make a lot of sense to me.”
Ley said some people oppose the idea of regulation for ideological reasons, but pointed out that intervention is a policy pursued by governments of all stripes.
“Hong Kong, Singapore, Sydney, London, they all have conservative governments. So these are not left-wing ideologues, these are conservative politicians who are responding to local needs,” Ley said.
He added if nothing else, B.C.'s government should be collecting data so it can develop a sense of what impact foreign ownership is having.
With a report from CTV Vancouver’s Mi-Jung Lee
