Foreign Buyer Tax Underlines Pre-Existing Trends in Vancouver Housing Market

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Oct. 6, 2016) - Canada Mortgage and Housing Corporation (CMHC) released a Housing Market Insight (HMI) report on the impact of the BC Foreign Buyers Tax (FBT) on the Vancouver housing market.

On July 25, the BC Government announced the implementation of an additional property transfer tax of 15% on home sales to foreign buyers. While it is too early to determine the long term impacts of the Foreign Buyers Tax (FBT) on Vancouver's housing market, preliminary analysis of resale data suggests the market was slowing down prior to the tax's introduction.

Report Highlights

• Prior to the tax's introduction, Vancouver was seeing a slowing pace of sales, an ongoing market shift to more condominium sales and a downward trend in average prices.
• MLS^® sales declined following the start of the tax, continuing an already established trend, particularly at the higher end of the price spectrum.
• While MLS HPI Benchmark prices have remained stable, the average price has declined, partly due to a change in the mix of homes sold.
• Foreign buyers and/or foreign capital are among many forces driving home sales and prices in Metro Vancouver. Economic and demographic fundamentals, combined with housing and land supply constraints drive housing activity and home prices.

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"Foreign buyer activity is one of many factors impacting the Vancouver housing market. Equally important are housing and land supply constraints as well as the economic and demographic fundamentals that drive housing demand. Sales and prices had already started to dip before the introduction of the Foreign Buyers Tax, so it basically underlined existing trends in the resale market."

Robyn Adamache, CMHC's Principal Market Analyst for Vancouver.

Additional data is available upon request.

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