Quote:
Originally Posted by Azure
The big issue we can control is foreign investment. There should be a federal law passed allowing for a 25% tax rate to be applied towards foreigners coming in and buying up real estate without actually wanting to live here.
The 15% tax rate in BC seemed to slow things down, but then they just target Toronto. Seems to me that there are lax regulations in our housing markets allowing the big foreign money to come here.
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I'm in development in BC. Our most recent project we sold has 345 units. There are 8 foreign buyers in the entire project. We sold out months before we thought we would, because we are the only development in that area that is selling. We had project a much longer time frame to sell, and at lower prices, but with no supply anywhere near us, it sold quickly.
In my view, the single biggest reason for the increased prices in the lower mainland, is government (city) regulation of permits. Permits take an inordinate amount of time to be approved, even for single family homes. It took me 10 months to get a building permit for my house, which was built with the zoning in place, and will add a rental suite to the market. 10 months for one house! I know of a condo development that took 8 years from the time the company bought the land, until they received the permit. Add in 3 years of build time, that's 11 years in order to bring 250 homes to the market. Of course costs have gone up in those 11 years, so the price to buy those units has gone up dramatically from what was first projected.
I agreed with the foreign buyer tax, although I think it was rolled out terribly. I do not think foreign buyers are the biggest factor in driving up the cost of lower mainland realty. That falls squarely on the permit office at city hall.
Canada housing bubble thread
