The Metro Vancouver real estate market has seen home purchases by foreign nationals take a massive hit following the application of a 15% tax on non-Canadians.
The number of transactions by foreign buyers nearly dried up, dropping from 2,034 deal in a seven-week period pre-tax to 60 in the four weeks post-tax (starting August 2), as reported by CBC News here.
The total value of home sales involving non-Canadians was $2.3 billion during the period running from June 10 to August 1. Sales averaged $329 million each week.
Once the tax was introduced, those sales took a leap off a cliff, plunging to a mere $46.9 million from the period running August 2 to August 30. The weekly average over the four-week period was $11.8 million.
Percentage of foreign national sales made up 0.7% of all sales, down from 16.5%.
B.C. Premier Christy Clark has praised these results.
“I think it is fair to say we have had an impact. That was the impact we wanted to have,” Clark said Thursday. “My hope is that many of those units that would have sold to foreign buyers, will now be sold to British Columbians.”
NDP housing critic David Eby isn’t completely convinced that the case is closed on foreign national influence on Vancouver’s housing market. He believes that foreign buyers will continue to buy into the Canadian market by using friends and relatives who are either Canadian citizens or permanent residents.