Experts doubt foreign buyer ban extension will help affordability
Over the weekend, Ottawa quietly extended its foreign homebuyer ban until 2027.
But some experts question whether it will make any difference to affordability in the Lower Mainland.
“The analogy I like to draw is a lemon that has had all the juice squeezed out of it by the foreign buyer taxes here, and by the empty homes and speculation taxes, so no real room for this to have an effect on affordability,” economist Tom Davidoff with the University of British Columbia’s Sauder School of Business said Monday.
In 2021, the year before the foreign buyer ban was announced, roughly 1.1 per cent of sales in B.C. involved a non-Canadian buyer.
"Notably, in 2023, prices basically rose steadily from the start of the year, so as soon as the ban was in effect, we had nothing but rising prices,” said Brendon Ogmundson, chief economist for the BC Real Estate Association. “So, as a sort of salve for affordability, it certainly is not a very effective policy."
And given the other measures in place locally, Premier David Eby offered a muted response to the ban’s extension.
“I don’t expect the extension of the federal foreign buyer ban to have a significant impact on the housing market in British Columbia as a result, but it may have an impact in other provinces where they don’t have these protections,” Eby said Monday.
While B.C. brought in a foreign buyer tax in 2016, the federal government only decided to implement a ban in 2022 – after local measures had already changed buyer behaviour.
“Canada, federally, is a little bit late with this foreign buyer ban, and a two-year extension just seems like a little bit of a fluff – maybe there’s an election coming up or something like that,” remarked David Hutchinson, a Vancouver realtor.
But others feel some restrictions around real estate are appropriate – and needed – even beyond this ban.
“There is going to be a needed national discussion about how you work with people who have second, third and fourth homes, who keep them empty,” said Andy Yan, director of the City Program at Simon Fraser University.
One area of focus for some researchers is what to do with people who clearly have significant wealth, but don’t contribute much tax.
“I think there are sensible demand-side measures,” Davidoff said. “There’s lots of homes that are occupied by Canadians really not connected to the local labour market, so not foreign buyers, but homeowners who are very affluent, but not through the work force.
“A lot of these people who own very fancy homes and are obviously very rich, but pay very little tax in Canada.”
Along with other researchers, Davidoff has calculated if there were a requirement on the owners of the top 10 per cent of homes by value to pay at least one per cent of property value in taxes to Canada and the province, that could generate $2 billion in each of Metro Vancouver and the Greater Toronto Area.
CTVNews.ca Top Stories
What Trudeau's podcast appearances say about the Liberals' next ballot box question
Trudeau recently appeared on four podcasts as he travels the country talking up the Liberals' latest budget, which he's pitching as a plan to inject more economic fairness into society for those under 40 — a cohort that has kept Trudeau in power since 2015 but is increasingly turning to Conservative Leader Pierre Poilievre.
Chants of 'shame on you' greet guests arriving for the annual White House correspondents' dinner
An election-year roast of U.S. President Joe Biden before journalists, celebrities and politicians at the annual White House correspondents' dinner Saturday.
What is a 'halal mortgage'? Does it make housing more accessible?
The 2024 federal budget announced on April 16 included plans to introduce “halal mortgages” as a way to increase access to home ownership.
Fair share: the right office solution can take finding the right partner
The rise of remote and hybrid work has made it harder to justify a full office, so more are leaning on co-working spaces that they share with many others for convenience and cost savings. The choice, however, comes at the expense of privacy and control.
Deadly six-vehicle crash on Highway 400 sparked by road rage incident
One person was killed in a six-vehicle crash on Highway 400 in Innisfil Friday evening.
Opinion I just don't get Taylor Swift
It's one thing to say you like Taylor Swift and her music, but don't blame CNN's AJ Willingham's when she says she just 'doesn't get' the global phenomenon.
Sophie Gregoire Trudeau on navigating post-political life, co-parenting and freedom
Sophie Gregoire Trudeau says there is 'still so much love' between her and Prime Minister Justin Trudeau, as they navigate their post-separation relationship co-parenting their three children.
Invasive and toxic hammerhead worms make themselves at home in Ontario
Ontario is now home to an invasive and toxic worm species that can grow up to three feet long and can be dangerous to small animals and pets.
Here's where Canadians are living abroad: report
A recent report sheds light on Canadians living abroad--estimated at around four million people in 2016—and the public policies that impact them.