Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

Finance Minister Michael de Jong, centre, said it may take some time before the new budget makes measurable difference.

CHAD HIPOLITO/The Canadian Press

The promise of the B.C. budget was that help is on the way so that more families can realize the dream of home ownership. The reality, say academics and economists, is that the measures will do little to allow those families to get into Metro Vancouver's superheated real estate market.

"It is like bringing a penknife to a gun fight," said real estate economist Tom Davidoff of the University of B.C.'s Sauder School of Business. "The impact will be pretty darn minimal."

Tuesday's budget increases the Property Transfer Tax on properties sold for more than $2-million, from the current 2 per cent to a rate of 3 per cent. That change is expected to pay for a new exemption from the tax on new homes sold for up to $750,000, a measure that was crafted to encourage more new home construction.

Story continues below advertisement

But the savings to the home buyer who qualifies for that exemption, worth up to $13,000, could simply end up in the builder's pocket because of the fierce competition for homes in the under-supplied markets in the Metro Vancouver region, he said.

Robert Kavcic, senior economist for BMO Capital Markets, agreed. "I honestly don't think it will do a lot to help affordability," he said. "At the end of the day, it could just end up boosting prices for new homes in that sub-$750,000 range. If someone is saving $10,000-$13,000 in taxes, there is $10,000-$13,000 more in their budget to bid."

Finance Minister Mike de Jong said in an interview Wednesday he can put more money into people's pockets with the measures announced in his budget but it may take some time before the new supply begins to make a measurable difference in the toughest markets.

"For people sitting on Kits Beach, this might be challenging, but you have got to take into account the broader needs of the entire province of British Columbia. Housing challenges and the importance of getting into the housing market are not unique and exclusive to [Vancouver's] Point Grey."

Vancouver Mayor Gregor Robertson bristled at the suggestion that people grappling with unaffordable housing in the city are unreasonable in expecting some relief from the provincial government. The average price for detached houses that sold last month in the City of Vancouver soared to a record $2.87-million, rocketing up 46 per cent since January, 2015, according to the Real Estate Board of Greater Vancouver. The B.C. budget offered very little that will help people trying to live and commute in the city, Mr. Robertson said.

"It's ridiculous to start pitting communities against each other," he said in an interview. "Vancouver has the most successful economy of any city in Canada right now and we are driving the success of B.C.'s economy. It's important to address affordability to keep Vancouver growing and diversifying."

Premier Christy Clark told reporters at a news conference in Vancouver that widespread speculation reported on Vancouver's West Side may very well be trickling down to make the rest of the region more unaffordable, but the government will not do anything to reduce the equity homeowners have built up in their properties.

Story continues below advertisement

"There are 100 different things that have that impact [on affordability] and [speculation] would be one of them, but we try to affect as many things as we can," Ms. Clark said. "What experts have said, and one of the things they've said most often, is they want to see a luxury tax on high-end homes and we brought that in."

Ms. Clark was referring to the new 3-per-cent tax rate on properties sold for more than $2-million. But she said the rate was set not to modify prices, but to pay for tax breaks at the low end of the market.

"Our focus was to take the new tax that was introduced and invest all of it in reducing taxes not in increasing public spending," said Ms. Clark.

The Premier spoke Wednesday at a news event at the downtown Vancouver headquarters of bookkeeping startup Bench, which moved from New York to Vancouver in the summer of 2013. Ian Crosby and Jordan Menashy, co-founders of Bench, said that they have had no problem recruiting and retaining employees in such an expensive city.

"So far in the business, it hasn't been an issue where someone didn't want to come because they thought Vancouver was unaffordable," Mr. Crosby said.

In recent months, the Premier has unveiled the provincial government's plan to attract such high-tech firms to set up shop in British Columbia. But leaders in that industry, such as Hootsuite founder Ryan Holmes, are now saying the high cost of housing is hurting them and will continue to hamper their ability to hire top-tier talent to Vancouver offices.

Story continues below advertisement

Michael Tippet, CEO of Wantoo, an online software platform that collects and organizes customer feedback, said the government's budget offers little more than "token moves" to help homegrown high-tech firms. "Starting a company is a bit like starting an art career – it's pretty hand-to-mouth," said Mr. Tippet, who ran Hootsuite's new products division for two years. "Good, ambitious, hungry entrepreneurs are not too flush with cash, so anything that affects affordability has a disproportionate impact on entrepreneurs."

Mr. Tippett questioned the wisdom of the government's assertion that plenty of affordable housing stock exists in Vancouver's suburbs, noting that an urban core where people live and work is central to the "collaboration and cross-pollination" that breeds success in his industry.

"[That] is something you want, it certainly should be an option," he said.

With a report from Brent Jang

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the authors of this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies