Whether you are from the Keynesian School, Adam Smith’s teachings or ascribe to a Milton Friedman persuasion is an individual choice. What can be said with some conviction is that our market forces have clearly been tweaked by a somewhat overdue market manipulation by government. Before I’m again berated and categorized as a ‘Satan’ by anyone misunderstanding my narrative, I want to say that the politically charged July/August 2016 decision did miss the target somewhat. Partial evidence being the about face, proposed exemption of foreign buyers with work permits. More evidence may come in the form of some pending class action lawsuits. Time will tell.
What is desperately needed is some evidence of a more affordable buyer market climate for younger Canadians (1st, 2nd time buyers) many young families. Discouraging well heeled non Canadians from using our more pricey residential Real Estate assets for their personal international investments is only part of the solution. Don’t get me wrong. I firmly agree with having buyers who are not Canadian conform to a different set of rules. We hear the term “too little, too late” but, as I heard one commentator say, we have a situation of “too late, too excessive”. The real problem here is the total disregard of those who, like some former directors of the Real Estate Board of Greater Vancouver were advocating a less punitive solution a number of years ago. Maybe something of the nature of an 8-10% tax and or a mor appropriate treatment of profits of non-resident investors. I heard mention of a 40/50% tax of those windfall profits. An introduction of such tax measures, say 10 years ago could have saved a lot of pain and suffering AND the extreme climb of Real Estate prices which the past several years forced upon us.
To view the UTD ‘Average Price Graph’, I have included the Board’s March News Release. Go to Page 9. The other data may also be of interest. Click here http://rem.ax/2ndYCN2 or copy into your browser. The illusion that average sales prices are dropping because fewer “expensive” homes are selling is by no means proof of any success on the affordability front.