Despite an increase in foreign buyers in the Greater Victoria real estate market last month, a local board says it’s too early to pull the trigger on a foreign buyers tax on Vancouver Island.
Earlier this week, the provincial government released new statistics that show foreign buyers made up 6.3 per cent of transactions in the Capital Regional District.
It’s something Finance Minister Mike de Jong said he’ll be watching closely in the next few months, as a gauge to see whether the 15 per cent Metro-only foreign buyers tax is spurring more buyers to other regions, including Greater Victoria.
“The trendline in Victoria seems to be upward. Not dramatically. But we’re watching it carefully,” he said, noting the foreign buyers tax legislation allows the government to adjust the rate or apply it to new regions at any time via regulation.
However, Mike Nugent, president of the Victoria Real Estate Board, said local realtor haven’t noticed an increase in foreign buyers in the market.
“I’ve talked to lots of members, visually and anecdotally, there’s not really any noticeable uptake. We’re not seeing it. It’s interesting that the provincial government numbers came in higher. I suppose there could be a few more. It’s not the numbers that we’ve noticed,” he said, noting when there were foreign buyers entering Victoria’s market, they were investing in larger, more expensive properties, not single family homes.
“Certainly six per cent is not a big portion of our sales.”
In August, the provincial government imposed a new 15 per cent tax on property purchased in metro Vancouver by non-Canadian citizens or residents, in an attempt to deal with the spiralling costs of real estate in the city.
It seems to be working so far in Vancouver. According to statistics, foreign buyers bought three per cent of residential properties in October, roughly 1.8 per cent higher than the rate in September, but still lower than the 13.2 per cent rate before the province imposed the tax.
Foreign buyers accounted for 0.9 per cent of sales in Surrey in October, 2.5 per cent in Vancouver, 5.9 per cent in Burnaby and 6.7 per cent in Richmond.
Elsewhere in B.C., foreign buyers made up about 2.9 per cent of all residential purchases, worth a combined $129 million.
However, Nugent has a number of concerns with implementing a similar tax on foreign buyers in Victoria. He noted, it’s not just Asian foreign buyers, but also foreign buyers from the U.S., who are moving to Victoria for work.
“Our top industry is high tech. You might have people coming in from anywhere. Do we want to do anything that actually impedes that? I don’t think it’s at a level yet where it’s warranted,” Nugent said.
“Hopefully the provincial government will tread very cautiously on that.”
— With files from Jeff Nagel