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comment by kleinbl00
kleinbl00  ·  2766 days ago  ·  link  ·    ·  parent  ·  post: Vancouver Real Estate Bubble Has Burst

IF: 597 homes sold last August in Vancouver

AND: BC started levying a 15% surcharge on foreign sales between last August and this August

AND: 87 homes sold this August in Vancouver

THEN ... well, correlation does not imply causation but if the whole point was to stop foreign speculation and

    The descent in housing sales is being perpetuated by China’s State regulated media which is warning Chinese buyers of the dangers of owning Canadian real estate.

...I mean, the "very small percentage" theory is kind of debunked.

For those of us who spent time in Vancouver before and after the return of Hong Kong to China, allow me to say that I find the idea of minimal foreign participation in the Vancouver market to be outright laughable.





sounds_sound  ·  2765 days ago  ·  link  ·  

Yeah, I think you're right kb. And like I said to mk, my feeling is that their participation is closer to 25%. That 5% was taken from a dubious BC government study that was done with not enough sampling and in too short of a time frame to get an accurate sense of the market. Ultimately doesn't matter because that only tracks foreign buyers anyway. What is more important is the foreign money, which is more likely funneled into the country through other means and difficult to trace.

    BC started levying a 15% surcharge on foreign sales between last August and this August

It's even crazier than that. The tax went into affect on August 2nd, this year, with very little warning. So while June and July also had a slow down, August had a precipitous, jaw-dropping slow down. But it's not likely that the 510 homes that weren't sold this month falls entirely on the shoulders of foreign buyers. The way I see it is that the foreign buyer has kind of become the monster in the closet in Vancouver. Where even if it exists, the idea of it is more potent and pervasive than the actual thing. That, combined with the fact that the market has become so focused on investment and speculation has made people just stop to wait and see what's going to happen.

kleinbl00  ·  2765 days ago  ·  link  ·  

The complexities in foreign real estate sales can't be overstated. Buddy of mine ended up buying a $525k condo in Long Beach because anything under $500k was being purchased by foreign REITS with cash. However, over $500k and suddenly it's actual citizens. That's entirely due to some US investment law about foreign holdings, or at least that's what the real estate agents tell you.

It's one of my biggest hesitations about the California market: the whole thing is outsized and ridiculous because of Prop 13, and any modifications of Prop 13 are going to queer shit up something fierce. Of course, everyone believes that Prop 13 is the 3rd rail of california politics but the sales tax here is more than it is in Seattle and Washington's income tax is nil and the roads are better, the schools are better, the libraries are better, the cops are better...

Never fuck with the government.