Vancouver Mayor Gregor Robertson's call for a speculation tax to dampen property flipping has received a muted response from the B.C. government.
Mr. Robertson joins condo marketer Bob Rennie in suggesting that the provincial government slap a tax on housing speculators to help control soaring property prices. Mr. Rennie raised the idea of a new tax during a speech Friday to the Urban Development Institute, a non-profit association.
Hours later, Vancouver's mayor trumpeted his own statement. "We definitely need taxation tools that discourage speculation on real estate. It's clear that rampant speculation on real estate is driving up prices in Vancouver," Mr. Robertson said.
On Sunday, he weighed in on the issue again, noting he is hearing daily from people complaining about the high cost of entry-level housing purchases and rentals.
The B.C. Finance Ministry injected a dose of reality, saying the provincial government recognizes that home ownership can be challenging, but there are complex factors to consider such as any new tax's impact on home values for existing owners.
"Governments need to be careful that any tax would have the desired effect, without undermining the equity that people may have built up in their homes," a ministry spokesman said in an e-mail.
"The First-Time Home Buyers' Program reduces or eliminates the amount of property transfer tax B.C. residents pay when they purchase their first homes."
At a rally outside the Vancouver Art Gallery on Sunday, organizers estimated nearly 500 people attended part or all of the gathering to draw attention to the lack of affordable housing, especially for millennials working in the city.
Eveline Xia, creator of the Twitter hashtag #DontHave1million, organized the rally along with help from Jennifer Fox of Generation Squeeze, a lobby group formed to represent the views of Canadian workers aged 40 and younger.
Some industry analysts say the market for high-end real estate in Vancouver has been driven up in part by wealthy foreign buyers, including from China, though that is largely based on anecdotal evidence because of the lack of data on buyers' backgrounds.
Ms. Xia said she understands the sensitive issue of offshore home-buyers. "It's not about the foreignness of the people but the foreignness of the money," she said. "How can we be expected to be compete for homes – condos, houses – with the globe's millionaires and billionaires?"
NDP caucus chairman Shane Simpson, who listened to speeches at the Vancouver rally, said the B.C. Liberal government needs to take a closer look at what role it can play to encourage more variety in housing choices. "You need to determine the details of what taxes are before you embrace them. But the notion of people flipping properties without adding any value is a legitimate issue. Both the provincial and federal governments have to step up," Mr. Simpson said.
Vancouver City Savings Credit Union (Vancity) forecasts the average price of new and existing detached houses sold within Vancouver's city limits could skyrocket to $4.4-million in 2030, if pricing trends of recent years continue unabated. The average price of new and existing detached properties sold within the city of Vancouver topped $1.9-million last year.
In March, a Vancity report said the average price for all housing types sold within Vancouver could double to reach $2.1-million in 2030, based on recent pricing growth for detached homes, condos and townhouses. The B.C. housing industry says pockets of the Vancouver-area market are expensive, especially with detached homes skewing average prices upward, but condos are relatively affordable in most neighbourhoods in the region. In Greater Vancouver, condos sold for an average of $457,729 in April.
Mr. Robertson said it is important for the B.C. government to introduce ways to discourage property flipping, and the federal government also needs to tackle the issue of affordable housing. "Steady, long-term cutbacks from the federal government are compounding our affordability challenges," he said Sunday.