Real Estate

Vancouver considers banning foreign buyers amid 'perfect storm' in housing market

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  • Dec 4th, 2017 10:27 am
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Vancouver considers banning foreign buyers amid 'perfect storm' in housing market

Vancouver considers banning foreign buyers amid 'perfect storm' in housing market
A foreign buyer ban is just one of numerous supply and demand measures outlined in Vancouver's new 10-year housing strategy

http://business.financialpost.com/real- ... ing-market


VANCOUVER — The city of Vancouver is considering restricting ownership of housing to local residents, among other strategies, as it looks to cool a hot real estate market that it says is fuelled by foreign and local speculation.

A foreign buyer ban is just one of numerous supply and demand measures outlined in Vancouver’s new 10-year housing strategy, which was announced late last week and presented to city council on Tuesday. Council will vote on it on Wednesday.

Even if passed, as expected, many of the measures being considered will need the support of federal and provincial governments, particularly those around taxation.

“There is a perfect storm in Vancouver,” Gil Kelley, Vancouver’s General Manager of Planning, told council on Tuesday, pointing to the “excessive supply of global capital” flowing into the city, along with builders targeting investors, low interest rates, and favourable tax policies.

Vancouver, long Canada’s most expensive housing market, has already made numerous moves to try to curb the crisis, including imposing an empty home tax and restricting short-term rentals.


Home prices on Vancouver’s upscale Westside jumped 57 per cent in the last three years, sending the typical price — including condos, townhouses and detached homes — to $1.4 million (US$1.1 million), according to the local real estate board.

In the Greater Vancouver region, the typical home now costs $1 million, 12.5 times the region’s median household income of $79,930, putting home ownership out of reach of many residents.

Rents have also jumped in recent years, with the vacancy rate hovering below 1 per cent, the city said.

The lack of affordable housing is putting strain on local businesses, with restaurants, retailers, and even the city itself struggling to find enough workers.

To address the crunch, Vancouver is considering new strategies including imposing a speculation tax, an increase to the luxury tax, and the possibility of “restricting property ownership by non-permanent residents.”

It is also planning to rezone neighbourhoods across the city to allow for denser housing, including more townhomes and low-rise condos, in areas traditionally dominated by detached homes.

It is the latest jurisdiction to consider restricting foreign investment in housing, following in the footsteps of Australia and New Zealand.

British Columbia last year imposed a 15-per cent tax on foreign buyers in the Vancouver area, which has helped cool the market for expensive detached homes, though demand for condos has exploded.
31 replies
Sr. Member
Oct 13, 2011
766 posts
502 upvotes
I suppose those who wants to buy will simply buy in North Van, West Van, Burnaby, Richmond, New West, Coquitlam, etc
Sr. Member
Sep 9, 2014
607 posts
578 upvotes
Vancouver
Would this even be constitutional? Seems a little bit disproportional. Or at least the I could see the Court thinking so.
Sr. Member
Feb 1, 2010
872 posts
173 upvotes
BryanBreguet wrote: Would this even be constitutional? Seems a little bit disproportional. Or at least the I could see the Court thinking so.
I know close by Whistler has areas where homes can only be bought by full time residents.
Sr. Member
Sep 9, 2014
607 posts
578 upvotes
Vancouver
I'm no lawyer but I could see how the case is stronger for Whistler where there could be an actual shortage for local residents. Or the % of properties not used as primary homes is much higher.

But I guess it shows that this can indeed be legal. I'd still expect a legal challenge if Metro Vancouver tried.
Last edited by Bryan2B on Nov 29th, 2017 3:40 pm, edited 1 time in total.
Deal Guru
Feb 9, 2009
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Trump would rip up nafta just on this
Deal Addict
Dec 23, 2010
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Moon
Do it. Should have been done long ago in all of Canada.
Sr. Member
Oct 13, 2011
766 posts
502 upvotes
alanbrenton wrote: From this older article, it says Metro Vancouver:
http://www.cbc.ca/news/canada/british-c ... -1.4232307

And from here, every place you mentioned is listed
http://www.metrovancouver.org/about/Pages/default.aspx

It would be ridiculous to implement only in the city of Vancouver and not the surrounding areas but we can all dream, can't we?
The original post you were referring to specifically said City of Vancouver. And just like the vacancy tax and short term rental ban, it is a City of Vancouver specific initiative.

Unless some one at the Provincial level comes out and say they are considering banning foreign buyers. Yes, you are right, someone is dreaming things up at this point. With close to 70% homeownership and the NDP holding a slim majority, it will take a lot of guts on their part to do anything legislative where they may get blame for crashing the province economy. Like it or not housing is one of the key economic driver in BC. A lot of people will be unemployed if there is a significant sustained slow down in the housing market.
Deal Guru
Feb 9, 2009
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Applesmack wrote: Do it. Should have been done long ago in all of Canada.
Dont agree -- we aren't a communist nation.

Maybe Canada should be able to be more productive to compete with all the money rushing over here rather then banning. And with the immigration mandate I dont see an outright ban anytime soon...
Deal Guru
Feb 9, 2009
12360 posts
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I think just watch New Zealand's banning of foreign investors in resale should be looked at closely... if it causes major issues then I dont see it coming here... if it doesnt then what does it matter anyways?

I dont see a benefit here either way.
Jr. Member
Jun 3, 2017
182 posts
141 upvotes
BryanBreguet wrote: Would this even be constitutional? Seems a little bit disproportional. Or at least the I could see the Court thinking so.
Although not a strict requirement in the definition of a constitution, history shows that constitutions generally protect its own citizens first and foremost.
Deal Guru
Feb 9, 2009
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AnotherDesiredUsername wrote: Although not a strict requirement in the definition of a constitution, history shows that constitutions generally protect its own citizens first and foremost.
Donald may do a little banning of his own if Canada ever tried this...
Deal Addict
Jan 20, 2016
2028 posts
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Houston, TX
If Van want to shoot himself in a leg (and NDP want to commit a suicide), that a good option.
Taking to account how much they (Van and BC) are getting from RE industry.

It was a story on http://awealthofcommonsense.com/ about (Nevada?) doing same stupid in 200x. They decided that "nonresidents" money is the root of evil, and banned non-residents from RE. In few years and hard hit on local finances they realized it was not the best idea after all...
Make the face great again
Deal Addict
Jan 20, 2016
2028 posts
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Houston, TX
Applesmack wrote: Do it. Should have been done long ago in all of Canada.
+1, let them do it. No better way to see the stupidity of NDP and their followers.
Residents and local economy would suffer, but who cares when we're talking about fairness!
Make the face great again
Jr. Member
Feb 5, 2017
134 posts
99 upvotes
Do it! GTA home owners would very much appreciate it.

I wonder why the US is open arms with foreign investment???
Deal Fanatic
Oct 7, 2007
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BryanBreguet wrote: Would this even be constitutional? Seems a little bit disproportional. Or at least the I could see the Court thinking so.
My understanding is that many places around the world have put in strict measures (including our very own Prince Edward Island) to restrict foreign ownership. I am wondering if the practice currently being followed of deliberately marketing Vancouver real estate to offshore buyers buy Vancouver's mayor and his friends is constitutional when we have so many homeless people and others who can barely afford to rent what they have.
Deal Fanatic
Oct 7, 2007
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I don't believe that the same City council and Mayor who have brought Vancouver to the terrible condition it is today are capable or at all interested in fixing any of the big problems that exist in the City today. I believe the 10 year home plan is all about LOOKING like they care and that they want to fix it while not admitting that they had a strong role to play in where we are today. The timing of this new plan is not a coincidence given that they have set the next civic election date in October 2018. If I had to bet, the only thing they are going to really focus on FIRST and FOREMOST is changing zoning across the City to allow for overdensification so they can continue to prove their insane (i.e. doing the same thing over and over again expecting a different result this time) behaviour of continuing to build higher density in the form of condos and claustrophobic living will make things "more affordable". There is no money or power in it for the City decision makers if they take care of the homeless or those who can barely afford to rent. Appealing to the developers is better for them because that's where the money is. Who cares about the residents.
Last edited by choclover on Nov 30th, 2017 10:27 am, edited 1 time in total.
[OP]
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Apr 21, 2004
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choclover wrote: My understanding is that many places around the world have put in strict measures (including our very own Prince Edward Island) to restrict foreign ownership. I am wondering if the practice currently being followed of deliberately marketing Vancouver real estate to offshore buyers buy Vancouver's mayor and his friends is constitutional when we have so many homeless people and others who can barely afford to rent what they have.
Other countries/jurisdictions have some form of restriction in place.
http://www.macleans.ca/economy/economic ... me-buyers/
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Jul 19, 2007
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Sanyo wrote: Dont agree -- we aren't a communist nation.

Maybe Canada should be able to be more productive to compete with all the money rushing over here rather then banning. And with the immigration mandate I dont see an outright ban anytime soon...
Worse...
Communist nations actually own their property.

I'm sure all that money was made by being more "productive".

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