The Vancouver Real Estate market has been closely monitored since the BC Liberal Government introduced its new 15% foreign homeowner’s tax. While some real estate agents and developers have cried foul amid halting sales and growing losses, a new forecast by Central 1 Credit Union says the trend will even out, leaving both buyers and sellers in a more stable position.
According to senior economist Bryan Yu, the new foreign buyer’s tax announced on August 2nd will briefly slow sales in Vancouver by about 10 percent.
“The foreign buyer’s tax will result in a temporary but substantial short-term cut in Metro Vancouver sales trend…the tax puts further downward sales pressure on a market already slowing from spring fever,” said Yu.
The average median price of property in Metro Vancouver jumped by nearly 20% between 2015 and 2016. According to Yu, the skyrocketing growth was unsustainable, and the new slower trend will be healthier for the economy. He predicts that provincial losses will likely be offset by sales in other locations—such as Vancouver Island and the Okanagan.
However, there’s no need to panic. Yu predicts the emphasis will eventually shift back to the Vancouver real estate market for a healthy 4 percent growth in 2017 and 2018—that’s only slightly lower than the 5.8 percent average growth predicted in 2017 by the BC Real Estate Association.
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