Last Updated on October 24, 2023 by Ephraim Vecina
Existing policies and market conditions in BC prevent many buyers and sellers from fully participating in the market, according to Vancouver’s Central 1 Credit Union.
The firm found that home sales in the province decreased by a massive 40% since the end of 2018. Currently, hopeful buyers are hesitating due to high price levels, while potential sellers would rather wait on the sidelines for a market recovery.
Stricter federal and provincial regulations were cited to be major factors slowing down activity, the analysis noted. Among the most damaging of these policies were B-20 (which weakened purchasing power by 20%) and BC’s 20% foreign buyer tax (which forced capital holders to invest elsewhere).
Even BC’s likely robust economic performance this year will not be able to offset these weaknesses, Central 1 deputy chief economist Bryan Yu said. Residential sales are estimated to further decrease by 11% in 2019.
And the actual situation this year might even be worse: Yu cautioned that the analysis did not take into account the possible effects of money laundering.
“These were model-driven numbers based on international numbers and I would say very little localized information,” Yu told The Canadian Press. “It seems to me we’re really still searching for those numbers and trying to get a better grasp of them.”
The results of a government report released last month indicated that dirty money inflated BC residential property prices by approximately 5% last year. Finance Minister Carole James also stated that money laundering could have “distorted” the Metro Vancouver housing market by as much as 20%.
Ephraim is currently a journalist at Mortgage Broker News, Real Estate Professional and Canadian Real Estate Wealth.
Ephraim is a highly accomplished news reporter whose work has been published across North America and the Asia Pacific region. Before joining Key Media, Ephraim spent eight years working as a journalist with Reuters TV. His areas of expertise include real estate, mortgage, and finance.
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