VICTORIA – The leader of the BC Green Party wants Canada to follow New Zealand’s lead in banning most foreigners from buying homes as it also grapples with housing affordability problems.
Andrew Weaver repeated his call on Wednesday for B.C. to ban foreign homebuyers instead of taxing them as the province does now.
“We know what the problem is. We know the source of the problem,” Weaver said. “There’s been a lot of offshore money flowing into Metro Vancouver … what that has done is driven up speculation.
“It isn’t like we haven’t seen this coming, but what it requires is bold leadership and strong public policy.”
Weaver says restricting foreign buyers is a widely used approach globally that could make home ownership more attainable for priced-out residents, reported CBC News.
Previously, the New Zealand housing market was open to investors worldwide, but the government on Wednesday passed legislation that allows only New Zealand residents to buy homes.
In recent years, there have been many anecdotes about wealthy foreigners from Silicon Valley and beyond buying ranches in picturesque rural New Zealand as a “bolt hole” or escape option from a turbulent world.
There have also been stories of wealthy Chinese buyers outbidding New Zealanders on suburban homes in the main city of Auckland.
Statistics indicate about three per cent of New Zealand homes are being sold to foreigners, but that rises to five per cent in the scenic Queenstown region and 22 per cent in central Auckland.
In Metro Vancouver, data shows foreign buyers are purchasing a minority of properties, but just how much varies considerably from city to city.
Weaver said reported numbers aren’t telling the whole story and foreign buyers are able to play “loosey goosey” with taxes and purchasing rules through trusts and partnerships.
He also blamed foreign buyers for creating a domino effect in the secondary market: When they purchase expensive homes in places like Metro Vancouver, the sellers use the profit to buy someplace cheaper, like Victoria or Nanaimo and then raise home prices there, reported CBC News.
Weaver has been calling for a foreign buyer ban for some time. In January, B.C. Premier John Horgan rejected the idea.
On Wednesday, Finance Minister Carole James said in an emailed statement the government is taking action on foreign speculation.
“We are pleased to be seeing positive results from these actions, in particular, the latest property transfer data showing that the numbers of foreign buyers in our least affordable housing markets is dropping,” James said.
