The B.C. Government is talking out of both sides of its mouth regarding the 15% foreign buyers tax.
Could it have anything to do with the upcoming provincial election on May 9th? One can only wonder.
According to UBC Urban Studies professor David Ley, Chinese investors believe that the 15% tax is not permanent. In fact, Christie Clark has already relaxed the rules allowing non-citizens who pay Canadian taxes not having to pay the tax at all.
Of the 170,000 foreign students and non-permanent residents in B.C. (of which one third are from China), they are allowed to buy properties of all kinds as proxies for foreigners. So what's the point of this tax to begin with? Sounds like a grand deception to mislead the majority of B.C. residents to believe that the provincial government is actually doing something about the hijacking of Greater Vancouver real estate by largely Chinese investors. However, in reality it's largely a smoke screen to let things carry on as per usual.
Fact is Chinese investors and the Chinese government have and will continue to dictate the future of our humble real estate market. We've essentially ceded control of our real estate market to foreign forces. According to data compiled by Bloomberg News:
“Metro’s housing market has long been tied to China’s economy. Our real estate prices have gone up and down in tandem with China’s fluctuating economy since the 1990s.”
Given that the Chinese speaking population make up around one fifth of the Vancouver's population, no provincial politician wants to agitate a significant voting block who wield such immense financial clout. That would equate to political suicide and no sane politician is that stupid. Furthermore, large developers are big contributors to the provincial Liberal Party and these developers want and need to keep on building and selling, which means not alienating or deterring Chinese investors.
Our future is written on the proverbial wall as some surveys they show that 40 to 60 per cent of China’s wealthy individuals want to emigrate and buy housing in another country. That amounts to a lot more wealthy Chinese headed our way even though Vancouver now ranks sixth as an investment destination behind 5 U.S. cities including Los Angeles and San Francisco.
So hold on as the political posturing and misdirection continues given the reality of our financial, economic and demographic future continues to be to a large extent in the hands of wealthy Chinese investors and the Chinese government's policies.
Partial Source: Douglas Todd. Vancouver Sun. Feb 18, 2017.