The British Columbia government’s attempt to entice first-time homebuyers with new loans will not result in a long-term fix for one of the country’s hottest real estate markets, according to Royal LePage’s CEO.
Phil Soper told BNN Wednesday that the loans - along with the foreign buyers’ tax introduced in August - send a two-pronged message to potential buyers, but do little for the market’s long-term health.
“It’s interesting public policy: On one hand, you hammer the market and, on the other, you give it a little shot in the arm,” Soper told BNN Wednesday. “It’s definitely pre-election politics. You hammer the Chinese and you add a carrot to the first-time buyers.”
“For the long-term health of the market, I don’t see it as particularly strong policy.”
Soper stated that the foreign buyers’ tax in particular caused an unintended ripple effect throughout the province that has driven transactions down on the whole.
“We saw double-digit, up to 40 per cent, drop in transactions after the introduction of the foreign buyers’ tax in the region,” Soper said.
“People believe that the Chinese are driving the Vancouver market and now that they’re not buying; [now they’re thinking] my gosh, the market’s out of whack.”
For the country as a whole next year he’s expecting a continuation of the trends that started playing out in the second half of 2016.
“I don’t see it changing in 2017,” Soper said. “I think the train’s going to continue steaming in Ontario. We’re going to have a correction in British Columbia, [but] the rest of the country’s actually looking pretty good.”