Foreign buyer tax is not the answer

VANCOUVER (July 28) – Home buyers in Metro Vancouver face many challenges, but competing with foreign buyers does not top the list.

Information from Royal Pacific Realty Group, the largest independent real estate firm in Western Canada, indicates home buyers instead face two major hurdles when they set out to buy a home.

“The first hurdle is saving a down payment in a region where incomes continue to lag far behind home prices. The second hurdle is finding an affordable home in a market where demand for lower priced units far exceeds supply,” said Andrew Peck, vice president and general manager, Royal Pacific Realty Group.

Taxing foreign buyers will not make home ownership more affordable for first-time home buyers.

The solution is for the government to bring in comprehensive housing policies which will increase the supply of more affordable homes. Making sure home ownership is within the reach of first-time buyers should be a top priority with the government.

While the new Housing Priority Initiatives Fund will help, it doesn’t go far enough.

“The government needs to increase the supply of medium-density, ground-oriented family housing,” Peck said.

A simple, effective policy response could be to provide financial incentives to Metro Vancouver municipalities to encourage rezoning for higher density, lower-cost family homes. There could also be funds for public education programs  on housing affordability issues including the costs of NIMBYISM.

“Our realtors have clients desperately looking for townhomes. If the government gave municipalities a financial incentive for each townhouse built, municipalities would increase their efforts to rezone property, said Peck. “Builders would build more townhomes and find eager buyers.”

Royal Pacific Realty Group is Western Canada’s largest independent real estate organization with a team of more than 1,200 real estate professionals working through four offices in the Lower Mainland.

Andrew Peck, Vice President and General Manager
Royal Pacific Realty Group; 778.387.2248

David Choi, President and CEO
Royal Pacific Realty Group; 604.328.8388