A survey of 535 real estate professionals suggests that moves by the B.C. government to crack down on housing speculators will lead to a broader decrease in consumer confidence.
The survey, released by real estate agency Royal LePage, found that 85 per cent of the professionals polled believe “the new tax policies have hurt consumer confidence in residential real estate across the province.”
Additionally, 78 per cent of respondents think home sales will decrease within the next three months (57.3 per cent say prices will also go down in that time period).
Asked if the new regulation will cool interest from overseas buyers, 77 per cent said it would, but only 11.3 per cent believe those buyers will feel the biggest impact of the new policies; 44.8 per cent of advisers believe B.C. residents will be most affected, while 43.5 per cent think the new taxes will most hurt Canadians from outside B.C. who own or are looking to buy property in the province.
“The expected impact of the proposed housing taxes announced in British Columbia should not be taken lightly,” Royal LePage CEO Phil Soper said in a statement. “Canadian homebuyers from coast-to-coast were already struggling with new federal restrictions on access to mortgage financing. We expect the impact of (B.C.’s) new government’s housing tax policies to be even more pronounced as they will force Canadians, Americans and potential buyers from elsewhere in the world out of the market.”
Interest in property in the province from Canadians outside of B.C. has already gone down, 81.5 per cent of respondents said, while 73.8 per cent believe those from outside B.C. who already own property in the province will look to sell.
This trend is pinned on the speculation tax, where 90.8 of the survey respondents said the new tax, which was modified from its original proposed orientation by the government earlier this week, will have an impact on buyers from other provinces like Alberta.
“There are further unintended consequences from these kinds of policy changes,” Soper said. “If property values decline, property tax revenues decline. Local municipalities will have to deal with this added burden.”
The provincial government’s 2018 budget will put in place a speculation tax in certain areas of the province on properties which are determined to be secondary homes. It also increased the foreign buyers tax in hopes of decreasing the influence of overseas money in driving prices beyond levels that locals can afford; and added a new school tax on properties valued over $3 million, which can be deferred until the property is sold or the owner passes away.
Source: The Vancouver Sun. http://vancouversun.com/news/local-news/b-c-speculation-tax-royal-le-page-report-says-new-real-estate-levies-could-hurt-consumer-confidence