We’re back to 2016 levels now across the region – sales in February were up 43 percent higher than the 10-year sales average, and 73 percent from the same time last year.
It was 2016, house prices were at record highs, and the pressure was so intense for government intervention that the then Liberal government rushed out the Foreign Buyers Tax – a special 20 percent levy on foreign nationals who everyone was convinced at the time were snatching up all the real estate in the Lower Mainland.
The market cooled for a bit, before roaring back to life later in 2017.
Premier John Horgan’s NDP government was put on the defensive this time, quickly launching a “speculation tax” designed to – and stop me if you’ve heard this one before – target foreign nationals who everyone was convinced were snatching up all the real estate in the Lower Mainland.
This time the allegation was the foreign buyers were leaving the condos and properties vacant, robbing locals of the ability to rent or purchase the unused properties.
Prices chugged along at a relatively inoffensive pace after that, before taking a dive at the start of last year’s pandemic and then roaring back to new record heights.
But missing this time is the 2016 level of public outrage. There are no online petitions, protests, or court challenges on provincial real estate policies.
That means there’s relatively little pressure right now on politicians to do anything to help. This is interesting because the BC government isn’t sure what it could do to cool the market, even if it wanted to.
Hard to blame foreign buyers anymore
The buying frenzy is being driven in part by pent-up demand, scarce supply, low-interest rates, and an affluent middle class emerging from COVID-19 in surprisingly solid financial shape.
Those folks have the purchasing power to seek out larger homes that have offices and backyards to give them more space to weather the rest of the pandemic. That’s not a group of voters the government particularly wants to target.
They aren’t easy villains to be hit with extra taxes, like foreign buyers or out-of-province speculators. They are instead the same kind of middle-class British Columbians the NDP has promised to help with housing affordability in the last two elections.
“In the short run that phenomenon that people are substituting towards larger detached homes and they don’t care about the commutes as much – I don’t think the government really should do anything about that,” said Thomas Davidoff, director of the University of BC’s Centre for Urban Economics and Real Estate.