When it comes to real estate in Canada, the Vancouver market tends to dominate the headlines. Sky-high property prices are a concern in the province, and there is a real fear that middle-class families are being priced out of the city. Foreign speculators are the villain in this particular narrative, so it wasn’t that surprising when the provincial government announced plans to increase property tax for foreign investors to 15%.
The move has been praised and derided almost in equal measure. Supporters say the tax hike was a necessary step to address a situation that is fast becoming untenable, while critics argue that action is indeed required, but not in this manner.
“This tax can be gamed,” says Jeffrey Olin
, president and CEO of specialist real estate investor Vision Capital Corporation, “and who are the people who can spend the money to game it? The high-net-worth people who want to buy these properties. The answer is supply.”
Olin believes that Vancouver’s hot market can be traced back to a lack of long-term planning. “You have a lot of environmentally conscious people in British Columbia,” he says. “You have agricultural reserves in the city, and there is a perception that is an environmentally sensitive thing to do. It’s actually the reverse.
“Maybe they were appropriate 40 or 50 years ago,” he continues, “but today we are building highways that travel past these reserves to build homes far out from the cities. Would it not be more prudent to create more density closer to the city? Agricultural land does not need to be in the city.”
Certainly, nobody wants to live in a concrete jungle devoid of green space, but Olin argues that the reserves have a huge cost to bear – a cost that is being placed on homebuyers.
“There is a massive supply of land that could be used to build affordable housing,” he says. “In my mind, that is more environmentally sensitive – having greater density in the urban centres served by public transport. If you are pushing those who want to live in the greater Vancouver area an hour away where there is no public transport, that’s not environmentally sensitive.”