Back in late July, the British Columbia government instituted a 15% foreign buyer transaction tax to "cool" the housing market which had generated an even more cool $2 billion Provincial tax windfall during the preceding bubble years. Then this week, the cash strapped Federal Government piled on with additional taxes to monetize the Canadian housing bubble...
The outcome was a 66% drop in single family home sales volume and a 33% drop in sales of all housing (condos etc.):
A drastic drop last month in the number of detached homes sold across Metro Vancouver — down as much as 67 per cent year-over-year in the worst-hit neighbourhood — is proof that B.C.’s new foreign homebuyer tax has hurt sales, and the slowdown could be the start of a crash, according to a real estate analyst.
SFU business Prof. Andrey Pavlov said it is interesting that the number of sales dropped at the same time as the number of listings rose.
“This is the first time this has happened,” he said. “If this trend holds up, we’re going to have increasing listings, decreasing sales and prices are going to start adjusting.”
Swiss bank UBS last week said Vancouver had the greatest risk of a housing bubble compared to 17 other high-priced markets, including London, New York and Sydney, Australia.
Price performance of Vancouver housing versus U.S.:
"Real estate and financial services now account for 20 per cent of the economy, levels not seen in the data since the early 1960s"
Canadian GDP (red) measured in $USD peaked two and a half years ago...
"We want lower