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Hysteria around Vancouver’s recent tax could create opportunity

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Justin da Rosa | 29 Aug 2016, 08:43 AM Agree 0
The media will kick up a storm of overreaction to the impact the tax will have on prices, according to one investor who argues it will create an opportunity for savvy investors
  • Mr. Bigglesworth | 05 Sep 2016, 03:47 PM Agree 0
    Mr Bigglesworth ages with Mr Kinch, and here's why:
    as I've mentioned in a previous post, keep in mind that the 15% sales tax equates to approximately (only) 6 months of the sort of year-over-year price increases that the City had been experiencing for the last 2-3 years, so ponying up another 15% is simply akin to paying market value for that property, at early-march 2017 prices, had the market continued as it was doing....was that going to be the ceiling? doubtful. Additionally, as previously mentioned, many sales of all property types completed at "over-ask" premiums of, often, 15%...sometimes less, sometimes more, but the point is, whether you pay the extra 15% by waiting 6 months and then paying market value, or by offering 15% over ask, or by paying a 15% tax, its all the same dollars, for the same property. (true, the fact that the 15% is a TAX affects things like PTT, CG's etc, but you still have to dig deeper by 15%)
    Kinch hits the nail on the head when he refers to the City's fundamentals, (just one of which is supply and demand), as being the drivers of prices here. Right now, the first wave of Baby Boomers all across Canada (and Europe) are entering retirement; they are fed up of freezing cold winters, and bugs and humidity, not to mention the bleak, aesthetically barren landscapes of virtually all cities and towns east of, well, i better not say...(Cambie)( oops!). (this Flat Earth Canada is the stuff of suicides, but i digress). In addition to retiring Boomers heading to the West Coast, we are on the radar of MANY other international investors; from near and far. Political, economic and civic stability, rule of law, moderate year-round climate, an inclusive society, and the ability to lead a healthy lifestyle (in a beautiful setting that resembles a garden more than a city, sometimes) , and of course our endless appearances on the Economist's "best places to live in the world" competition. Vancouver kicks serious butt when it comes to awesome places to live: to truly appreciate it, one has only to leave it, for a while.
    So yes, people will always want to move here, from all over the world. To think that a 15% surcharge, (in CAD$$ no less!) is going to deter any serious buyers/immigrants/offshore investors, especially in the long-term, is an indication of how naieve and parochial we can sometimes be.
    significantly, our houses and condos represent safe places for investors from all over the world, especially given stock market volatility, fixed-income returns, and macro-economic risks. (anyone been to France lately? what if enough of Trumps trailer-park base leave their stills long enough to vote?...) We still have a along way to go before this city is fully valued. We'll get there, though...markets work like that.
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