There are serious problems with the B.C. government’s response to the foreign ownership issue last week – after just three weeks of studying the problem after changes to the property transfer tax form.
Here are some takeaways from a series of reports which fall considerably short in dealing with a growing affordability problem.
First, the reports suggest property flipping isn’t a problem and speculation is no worse than in previous hot real estate cycles.
But the information provided on property flipping was for all of B.C., not just markets where the activity is most heated. As well, property speculation may already be on the wane because of the challenges in flipping an already over-priced property, and thus not a really useful data set.
The report stated that foreign buyers only make up a small part of the market, or 5.1 per cent in Metro Vancouver.
Sadly, nobody believes this because place of residence is self-reported and the purchaser can use a company or law office with a local address.
The report also notes that 3,603 families have saved an average of $7,060 on their newly purchased homes and 10,470 didn’t have to pay property transfer tax because they were first-time buyers.
Unfortunately, these amounts are chump change when compared to the size of a down payment and a mortgage on the rocketing benchmark price of single-family home, now soaring above a half-million dollars in the eastern Valley to well over $1 million in the Metro Vancouver area.
The bottom line is people who were supposed to be in charge were asleep at the switch and Lower Mainland families are paying a hefty price as a result — a price fewer and fewer can afford.
– Black Press