The numbers speak for themselves, no two ways about it!
The Canadian and international press reported on October 26th that the Metro Vancouver market has plummeted with the rate of foreign investment dramatically dropping to 1.3% from 13.2% which was the seven week average just prior the 15% foreign buyers tax being introduced on August 2.
I don't know what the provincial government thought would happen with the introduction of this 15% tax but I'm sure that they didn't expect this. What this tax has achieved however, is to expose the vulnerability of the Metro Vancouver housing market to who have been the real drivers of house prices – predominantly Chinese investors.
Vancouver is a small to mid-sized city in the overall global scheme of things, so the natural market forces that normally drive real estate values have been greatly affected primarily by the enormous influx of Chinese investors who want to park their money outside of China. The reality is that we are now at the point where our market will continue to be greatly influenced by the policies of the Chinese government as well as our own provincial and federal governments. I'm pretty sure their respective policies will be motivated by their own objectives which puts Vancouverites in the middle of a somewhat dysfunctional monopoly game.
Normal real estate market forces have been, and will continue to be, greatly skewed and distorted by provincial, federal and foreign government policies. These governments are acting independently of one another thus leaving our housing market adrift in an uncharted sea. I suppose this is new world we live in and we've never experienced anything like this before.
Of course we are all going to continue to buy and sell property but it is becoming increasingly challenging to know exactly what the fair market value is at any given point in time. Having gone from a red hot market to an anaemic market at best in a matter of weeks is a direct result of various government policies. I hope governments understand that they are playing with real people's lives here and that their policies have dramatically impact us all. Clearly, this isn't over yet and many in Greater Vancouver are taking a wait-and-see attitude and delaying making any real estate decisions until this uncertainty we are experiencing settles down.
These are indeed uncertain times and that's why it's even more imperative to seek seasoned and objective professionals. I'm here to provide help and support regarding your real estate decision making process should you need it.