"Absolutely, [it’s negatively impacting Canadian buyers]. Anybody who would say different would be ridiculous. As an investor it’s been hurtful in terms of narrowing the market,” Hans McFarlane, a Vancouver-based investor, told Canadian Real Estate Wealth.
“You’re narrowing the demand for your house and who is going to have a desire to buy it. It’s certainly brought the prices down and cooled the market.”
Vancouver’s Liberal government enacted a piece of legislation August 2 that included a 15% tax on foreign buyers of real estate. And the effect was immediately felt.
Sales dropped in August, according to the Real Estate Board of Greater Vancouver. Total sales fell 26% year-over-year to 2,489 last month.
They were also down 3.5% from the 10-year sales average for August.
However, the board hasn’t quite sounded the alarm.
“It’ll take some months before we can really understand the impact of the new tax,” Dan Morrison, REBGV president said following the release of the data in early September. “We'll be interested to see the government's next round of foreign buyer data."
We don’t need to wait to see the impact, though, according to McFarlane.
“The impact has been immediate. The premier has been quoted saying it has had the effect it was supposed to have,” he said. “It’s hurt the people who live here who have homes and it’s done nothing for the people with low income who want to buy in the market.”
How does McFarlane, as an active investor, feel about the tax?
“Personally, I think the whole thing is ridiculous,” he said. “I believe in a free market economy, if I’m selling my house or my car I don’t care who buys it.”
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The Vancouver foreign buyer tax is hurting homegrown investors, according to one.