Foreign buyer study not a waste: province
The B.C. government says it can still find a use for an unfinished study into the effect of foreign buyers on local real estate, even if it has already leapt ahead with a foreign buyer property tax.
Housing Minister Rich Coleman said Thursday that the foreign buyer research, which was started by B.C. Housing in February, will cost $68,000 and be completed by the end of the year.
“This is a complex issue and certainly the province finds value in any credible data or analysis which may help inform further consideration, discussion, and future decision-making,” Coleman said in a statement.
“We look forward to the findings. The study is intended (to) go far beyond the scope of recent policy changes, which government decided to act upon more quickly to address immediate challenges in (relation) to housing affordability.”
The Opposition NDP maintains the study is a waste of money because the government charged forward with the 15 per cent foreign buyer tax last week, without waiting for any data or conclusions from the research. Any work would be of dubious value because government dramatically changed the marketplace with the new tax halfway through the study period, said NDP critic David Eby.
“This is evidence of the sudden panic and rush to get something, anything on the table for the public that showed some kind of action other than just studying the problem,” said Eby.
“This study and the money spent on it is a victim of that.”
Though the province describes the research as far-reaching, internal documents show it’s focused heavily on the issue of foreign buyers in real estate.
“Currently there is not any direct way to determine the magnitude of foreign ownership,” reads a 20page proposal to government by the Conference Board of Canada, which was hired in February to conduct the research.
“Any current data sources are subject to many caveats and not very reliable … given these data gaps, determining the magnitude of foreign ownership of residential real estate in B.C. will be the study’s biggest challenge.”
The Conference Board described a detailed plan to define foreign ownership, review existing data and canvass other countries like Australia, Switzerland and the United Kingdom.
It proposes to examine existing statistics from B.C. Housing, the Canadian Real Estate Association and the Canadian Mortgage and Housing Corporation to “build an economic model of the B.C. housing market and the markets for Vancouver and Victoria” using quantitative analysis.
“For instance, one hypothesis that will be tested is whether foreign influence on Vancouver’s residential market is confined to high- er-priced, single-detached homes in certain neighbourhoods,” reads the proposal, obtained by the NDP under Freedom to Information.
The government said the study will also look at land availability, zoning, time frames for approvals, fees and charges for community amenity contributions, interest rates, construction costs and availability of trades and labour.
The Conference Board initially proposed a six-month timeline, to be completed June 30. But the government now says “a final study is expected to be completed by the end of the year.”