Rapid-fire policy regime harms Vancouver real estate investment

Vancouver real estate investment volume is shrinking due to perceived instabilities in the market’s regulatory regime, according to CBRE Ltd.

The successive introduction of new regulations that target foreigners has done no favours for the market in terms of investment. If anything, Toronto is benefiting more from the situation.

“You have policy changes on a snap, on a whim,” CBRE Ltd. executive vice president David Ho told Bloomberg in an interview.

“Investors typically look at stability in a market and this is not stability.”

CBRE figures indicated that from the $1-billion-plus volumes seen in 2016 and 2017, foreign investment in Vancouver sharply declined to just nearly $350 million in 2018.

In comparison, Toronto significantly exceeded its 2017 volume with its $526 million in Asian investment last year.

Speculation levies, a wealth tax on homes, and the recently proposed Landowner Transparency Act scared off a considerable number of foreign capital holders, CBRE added.

Moreover, Toronto’s status as a vital global tech hub – which continues to magnetize millennials and immigrants – has proven to be a major boost for its commercial and industrial property sectors. Many members of the two demographic groups participate in the city’s flourishing tech and financial services market.

“That spells money because young people have to consume, they’re growing families,” Ho explained. “That’s a huge advantage against the Vancouver market, which is more of a retirement market.”

 

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