A growing proportion of British Columbia residents believe housing interventions by the provincial government through taxation are ineffective in improving affordability, according to a new survey by Research Co.
While 42% of respondents still believe taxes effectively make housing more affordable, this is down by 15% from a similar survey conducted a year ago in June 2020.
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This month, 43% believe the government’s housing actions are ineffective, representing a year-over-year increase of 12%. Another 16% are undecided, up by 4% year-over-year.
However, the vast majority, 70%, agree with the decision to implement the speculation tax in select major urban areas targeting foreign and domestic homeowners who pay little or no income tax in BC and those who own second properties that are not long-term rentals.
Three quarters (75%) support expanding the foreign buyer’s tax outside of Metro Vancouver, and increasing the tax rate from 15% to 20%.
Moreover, 69% support the introduction of a tax of 0.2% on the value of homes between $3 million and $4 million, and a tax rate of 0.4% on the portion of a home’s value that exceeds $4 million. The level of support for these measures is down 7% year-over-year.
A similar proportion (67%) agree with the decision to increase the property transfer tax from 3% to 5% for homes valued at over $3 million, with the 5% portion applying to values greater than $5 million. Support for this policy is down 5% year-over-year.
Those who voted for the BC NDP and BC Green Party were 10% and 6%, respectively, more likely to support the speculation tax than BC Liberals voters.
The survey also gauged potential support for enacting policies similar to New Zealand, where most foreigners are banned from acquiring real estate. The few exceptions are for foreigners who hold residency status in New Zealand and citizens of Australia and Singapore due to free trade agreements.
Support for the New Zealand model dropped by 6% year-over-year to 72%, with support for this type of legislation highest amongst women (75%), British Columbians aged 35 to 54 (74%), BC NDP voters (78%), and residents of Northern BC (90%).
These survey results follow a year of heated market activity, with province-wide home sales up by 312% year-over-year and average prices up by 29% year-over-year to $947,000 in April 2021, based on BC Real Estate Association’s latest compilation of local real estate board data.
For May 2021, the Real Estate Board of Greater Vancouver (covers most of western Metro Vancouver, including Vancouver) reported a benchmark home price of $1.73 million, representing an increase of 14% year-over-year.
The Fraser Valley Real Estate Board (including Surrey and Delta) saw an average price of $1.009 million in May 2021 — a 35% increase from $747,000 in May 2020.
Industry analysts continue to assert that governments need to develop policies and strategies that catalyze new housing supply to help stabilize prices.
“The seller’s market conditions experienced throughout much of the pandemic highlight the need for increasing the volume and variety of housing supply across our region,” said Keith Stewart, the economist for the Real Estate Board of Greater Vancouver.
“Doing this requires a more disciplined focus on planning, reducing building costs, understanding demographic changes, and expediting the building approval process.”