Think the foreign buyer tax reduced sales of Vancouver real estate? Not exactly. Declining sales have more to do with a Chinese clampdown on outflows in December, and new capital controls in January. While we won’t bore you with the details of the new capital controls in China, we will walk you through the impact. Since the new controls, sales declined for the first multi-month period in Vancouver. This is opposed to the growth observed immediately after the foreign buyer tax.
Foreign Buying of Homes Under A Million Dollars Drops
Vancouver sales of places under a million dropped shortly after the new rules in China. February saw 241 sales, a 16% decline from the month before. January saw 289 sales, also a drop of 12% from December. In contrast, from August (the first month BC implemented a tax) to December, foreign sales increased 68%. It looks like foreign buyers actually just adjusted their budget to price in the additional tax, and an actual decline wasn’t seen until China’s move.
Foreign Buyers Purchased Less Property
The number of properties sold to foreign buyers also declined in the past two months. February saw 289 properties sold to foreign buyers in total, a 13.73% decline from the month prior. January saw 335 sales to foreign buyers, a 13% decline from the month prior. To contrast, December saw a 52% increase compared to August, the month after the tax was implemented. If you’re not a real estate nerd, Decembers are rarely busier than August.
