Foreign buyer tax, vacant home tax, record-breaking home sales and prices… There has been no shortage of exciting real estate market stories in 2016, that’s for sure. Our sector has gone from the hottest market Greater Vancouver has ever seen, in spring of this year, to plunging below 10-year averages, all in the blink of a policymaker’s eye. All of which makes for fascinating reading as we look back over our most-clicked market articles of the year – and it’s no coincidence that the new foreign buyer tax dominated headlines. Here they are in reverse order…
In the early part of this year, the 2016 provincial budget raised the ire of some by failing to increase first-time buyer subsidies, favouring buyers of new homes instead. In an unexpected move, which had been widely predicted to be a cut in Property Transfer Tax for first-time buyers, the finance minister Mike de Jong announced that buyers of newly built homes up to $750,000 in value will no longer have to pay PTT, saving those buyers up to $13,000. This ensuing editorial examined the policy in further detail.
The most-read – and, as it turned out, most controversial – editorial this year was one published in April, advocating a moderation in political and media dialogue to calm the fevered panic-buying of Vancouver real estate that was prevalent in spring this year. In interviews with the editor and numerous social media comments that followed, a number of mainstream-media outlets seemed to take exception to the suggestion that they could have had any role in this market hype.
Another big-ticket item for real estate market news this year was the City of Vancouver’s vacant home tax. It had been talked of previously, but September 14 was the day that Mayor Gregor Roberson and Kathleen Llewellyn-Thomas, general manager of community services, revealed the initial details and start date of the tax at a press conference on the steps of City Hall. However, the full details of the amount and exemptions were not revealed until November, after the fall public consultation process was completed.
In April – pre-foreign buyer tax and new mortgage rules – the scorching spring market led Central 1 Credit Union to issue this bullish forecast on West Coast real estate for the next couple of years. You might thing they would have changed their tune since then, but as the #2 story in this chart reveals, the economists at Central 1 were hardly less optimistic towards the end of the year.
It wouldn’t be 2016 without a Trump story, and this doozy from two days after The Donald’s presidential election victory raised a lot of eyebrows. It seemed that a lot of Americans were making good on their threat to move to Canada if Trump got into the White House – or at least considering their options – as searches for Metro Vancouver homes from US IP addresses tripled the day after the election.
The National Bank always likes to come out with a media-attention-grabbing press release, and this year was no different. In October it made the assertion that policy changes such as the foreign buyer tax and the new mortgage qualification rules would mean average Vancouver home prices would drop 10 per cent over the following 12 months. The economist cited in our #2 story begs to differ, so we’ll just have to wait and see who is right…
No surprise that this story is one of three on this chart about the overseas buyer tax, which dominated headlines this year (and the other two stories are indirectly related, too). In what was something of a reactionary piece, with the region clamouring for immediate news of the effect of the foreign buyer tax fallout, this article revealed that sales were down 63 per cent in the first couple of weeks after the August 2 introduction of the new tax. However, it was careful to add the context that this was early data and likely caused by a combination policy shock and inflated July sales. Indeed, another story just a week later revealed that total August home sales registered by the board were not down by as much as early data had suggested.
Ah yes, the sad tale of the Benner family really captured our readers’ interest this year. Nic Benner, an American living in Langley and working as a contractor at Telus, reached out to REW.ca to share his sorry story of being caught by the foreign buyer tax on his family’s soon-to-be-completed new home. If they were to come up with the additional $80,000 tax that they had been blindsided with, Benner, his wife and four daughters would be forced into forfeiting the $25,000-plus deposit, walking away from their dream home and continuing to pay out thousands in rent.
The second-most-read market story of the year was even more bullish, with a leading Canadian economist from Central 1 Credit Union predicting that the foreign buyer “policy shock” would wear off within a few months and prices would recover to be even higher in September 2017 than this year. It’s too soon to tell if that was a case of over-confidence on Helmut Pastrick’s part, or whether he could be right. Although average prices have been sliding since August’s peak, they are not falling very rapidly – yet – and could indeed bounce back in the spring 2017 market. Watch this space…
Published on the day that the new foreign buyer tax was implemented, it’s no great shock that this was by far the biggest story of the year – in any of our news categories. Following the previous week’s announcement about the new policy, the industry had been scrambling to get as many deals as possible pushed through before August 2. As the deadline arrived, agents and lawyers started reporting cases of those that hadn’t made it in time and would either be unexpectedly hit by the new tax or just collapse under its weight entirely.