The new 15% tax on real estate purchases by foreign buyers in Metro Vancouver went into effect August 2nd, and although it is still too early to judge its “spillover effects” and the resulting data, other major Canadian cities now see potential for increased business that was not there before.
“I think everybody’s speculating right now and I think they’re speculating with a positive outlook,” says Calgary Real Estate Board President Cliff Stevenson. “I would suggest we are going to see an increase in investment from foreign buyers.” He also claims that the rate of inquiries from foreign buyers, particularly from China, is increasing.
Chinese investors in Canadian real estate have long been attracted to Vancouver in the west and Toronto in the east because “that’s where friends and family of buyers have invested,” according to downtown condominium specialist Jakie Ng (Re/Max River City, Edmonton), but Calgary has also gained some appeal in terms of accessibility, as there are currently three non-stop flights which go from China to Calgary. Jakie Ng also noted increasing foreign investment in Edmonton’s housing market until 2014 and believes it is another attractive option for foreign buyers who wish to avoid the 15% tax in Vancouver. “There are a lot of opportunities in Alberta that people are very attracted to,” he said.
According to figures from the Realtors Association of Edmonton in early August, the city’s average sale price rose only 3% in the past year ($384,505 in July 2016) while the number of units sold was down 16% in the same time-frame. Steve Sedgwick, chairman of the Association’s board of directors, claims that this discrepancy and the city’s reasonable cost of living contribute to its appeal to foreign buyers regardless of the new tax in Vancouver.
Sedgwick also believes it is in Edmonton’s best interest to work with international investors: “In Alberta, there’s certainly no speak of any land transfer or foreign ownership taxes being considered by our current administration. I know that the Realtors Association of Edmonton is working actively with the Alberta Real Estate Association to make sure things like that don’t get implemented that could otherwise impede property ownership and/or market activity.”