Don’t expect Victoria to try and cool the housing market: expert

UBC economist doesn’t think the Liberals will do anything because of political influence from developers

Local columnist calls for a six-month ban on foreign home ownership

VANCOUVER (NEWS 1130) – We’ve heard calls for everything from new taxes to an outright ban on foreign ownership, but you’re being warned not to expect any drastic action from the provincial government to help cool our white-hot housing market.

An economist at UBC says it’s unlikely Victoria will take even “reasonable steps” to lower prices. Tom Davidoff says part of the reason could be the political influence of those who benefit from a heated market.

He says there is no question developers have influence in the province because they’re an important part of the economy and because they make substantial political donations. “I think the province doing something that faces strong oppositions from the builders is probably unlikely.”

When it comes to a temporary ban on purchases by foreign buyers, Davidoff says that would be a step too far. “[It] brings in nationality in a way that’s unfortunate, and given the province’s unwillingness to take reasonable steps, I don’t expect them to take a stronger step.”

Davidoff thinks it’s more likely to have foreigners who buy homes here pay higher property taxes. “But it wouldn’t be tied to nationalities.

Somebody from Calgary would be treated symmetrically with someone from Shanghai and the beauty of that tax is it’s very difficult to evade. Whereas I suspect, if you ban foreign individuals from buying property here, they’ll buy as local individuals, as local corporations or as foreign corporations which may not be banned.”

He doesn’t think the NDP would consider the same idea if the party was in power.