Report shows government's changing opinion on foreign buyers
Richard Zussman | CBC News | Posted: August 6, 2016 12:11 AM | Last Updated: August 6, 2016
November 2015 doc shows province initially thought foreign buyers 'may not be sufficient' in housing crisis
An internal government request for proposals reveals the province did not think foreign ownership of housing was "sufficient" enough to impact the market.
Yet a few months later, the government had a change of heart and decided to institute a tax on foreign buyers even though the final report had not yet been delivered.
The document released under the Freedom of Information and Privacy Act defined the parameters for companies to bid on a research project currently underway to examine "key factors affecting home prices in B.C."
"Existing data suggests that foreign investment in residential real estate may not be sufficient to impact the Metro Vancouver housing market, except for a small segment of luxury homes," reads the document under the heading: Requirements and Deliverables from November 2015.
"The upward pressure on single family detached home values is largely driven by limited supply, high demand and low interest rates."
Foreign Buyer Impact
The provincial government has since completely altered its stance on the impact of foreign buyers, putting in place a 15% property transfer tax increase for foreign nationals.
"This will have I hope the impact of making sure we reduce the number of foreign buyers in our market in the Metro Vancouver area," Premier Christy Clark said after introducing the tax.
Other Factors
Despite the change of heart, the province is still proceeding with a $68,000 research study to look at factors affecting home prices.
The study is expected to be completed by the end of the year, six months after the original deadline set by the government.
"There are many factors involved in the housing market, supply and demand," said Advanced Education Minister Andrew Wilkinson, a former deputy minister in the B.C. Ministry of Economic Development, speaking on behalf of the government.
"There are things like land use, zoning, taxation levels involved and the cost of putting together new housing. So this will be a study that will address all these factors, not just taxation."
Wilkinson says the government decided to act in advance of the full report because of the initial numbers that were coming in on foreign house purchases.
"The fact we have $170 million going into that category on a weekly basis is a great concern," he said.
Waste of Money?
But the NDP doesn't believe the report is necessary anymore considering the government has already taken the drastic step of implementing the tax.
"It almost seems like the conclusions were already written before the thing was produced," observed David Eby, the NDP's housing critic.
"They were looking were for a company to confirm their pre-existing view and now it will be terribly embarrassing if that is what the report does, you know if it comes out saying that international money is not a problem and here they are now saying it is a big problem."