Trying to push down housing prices by lowering the housing demand could hurt B.C.B次元官网网址檚 economy, the B.C. Real Estate Association says.
Chief economist Cameron Muir said their models show that even a 10-per-cent rapid drop in home prices could mean a 1.5-per-cent economic downturn, 26,000 jobs lost, and 10,000 fewer housing starts.
B次元官网网址淚t could effect the economic growth of the province in terms of economic output, but also retail sales, labour market, unemployment rate, housing starts and of course also the loss in equity and homeowners which comprise 70 per cent of B.C. households,B次元官网网址� said Muir.
B次元官网网址淗ome prices donB次元官网网址檛 fall on their own. There are ramifications to that.B次元官网网址�
The NDP government has faced near-constant backlash . The tax would charge homeowners who donB次元官网网址檛 pay income taxes in B.C. up to two per cent of property values each year in a bid to cool the market.
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The B次元官网网址� a 20-per-cent tax on property purchased in B.C.B次元官网网址檚 major urban areas by non-Canadian citizens or residents introduced by the previous Liberal government B次元官网网址� made a lot of potential homebuyers B次元官网网址渟kittish,B次元官网网址� he said, delaying home purchases for several months and without doing much to push down prices.
Developers see potential buyers hesitate, he said, and in turn, slow down the pace of their construction projects.
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Instead, he said, the province could focus on ramping up supply because that would not only ease the pressure on prices but also provide plenty of jobs.
Muir pointed to the record-breaking 42,000 homes being built in Vancouver currently, up from a previous high of 27,000 units.
That number is mirrored across the province, he added, with many homes under construction set to be complete within the next several quarters.
Once those homes are built, house prices will flatten, Muir said.
B次元官网网址淭he prime culprit for rising prices is that it takes so long to complete a housing project B次元官网网址� weB次元官网网址檙e talking five years or longer.B次元官网网址�
A 2017 Fraser Institute report found that on average, it takes 10.2 months just to approve a home build in the Lower Mainland.
Most new housing starts are multi-family, Muir added, which take longer to build, even if they eventually house more people.
Although he said thereB次元官网网址檚 B次元官网网址渘o silver bulletB次元官网网址� for getting more houses built, stopping a record-breaking building season is certainly the wrong choice.
B次元官网网址淚n my mind, itB次元官网网址檚 folly to stall out the construction industry now.B次元官网网址�
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