Much has been made about whether the Government of Canada's foreign buyer ban -- technically called the Prohibition on the Purchase of Residential Property by Non-Canadians Act -- will really cool the housing market and make homes more affordable for Canadians.
According to Statistics Canada, British Columbia continues to see one of the highest amounts of immigrants in Canada, and Vancouver has a historic connection with Asia that remains strong, particularly when it comes to foreign money. So if the foreign buyer ban were to have an impact anywhere in Canada, Vancouver would be a decent bet.
"This particular legislation backs up a key election promise," O'Toole says.
O'Toole points to the real estate boom Vancouver saw during the COVID-19 pandemic, which resulted in a record-high amount of sales in 2021, as evidence.
"Where were the foreign buyers during the pandemic boom? There was no international travel, yet that was when the market started to boom," he says.
O'Toole says he believes foreign buyers were somewhat more of a problem over a decade ago, and much of that has already been greatly tempered since the Province introduced its foreign buyer tax in 2016. This charges a steep 20% tax (originally 15% and later raised) on property transfers where the buyer is a foreign national.
Foreign buyers were estimated to have accounted for just 1.1% of home sales in 2021. That was the pandemic year, of course, but as O'Toole points out, the housing market was not just surviving, but thriving.
O'Toole also has some questions about the technical aspects of the legislation.
Like those who have pointed out that the ban seems somewhat contradictory to the federal government's lofty immigration targets, he understands the foreign buyer ban may send the wrong message to those looking to immigrate to Vancouver -- or anywhere else in Canada -- and that many may look elsewhere as a result.
Another indication that the federal government wasn't fully prepared, he says, is that despite the ban being first made public in April, many of the details were not clearly defined until late-December, less than two weeks before the legislation came into effect.
Additionally, O’Toole sees that there could be other ways to balance the housing market and support local buyers, such as tax breaks.
Only time will tell whether the new legislation will be able to cool the housing market.
This article was produced in partnership with STOREYS Custom Studio.