New stats are out from the Ministry of Finance and they reinforce what we have already noticed: the foreign buyer tax was blunt but incredibly effective. The percentage of foreign buyers in Vancouver is down some 90% from before the tax, and while there was a small bump in September, they are now down to at or below the average of the rest of the province.
There was some concern that a tax in only one region would push buyers to other regions, most notably Victoria. However that fear has turned out to be unfounded, as the sudden implementation of the tax and the warning it could be extended to other regions has put the fear of Clark into any buyer that may have still had their heart set on BC.
While there was a slight decline in Victoria as well, that is as likely to be noise as signal. Essentially there was no impact. Of bigger importance to our market is whether the small flood of Vancouver buyers we saw in the spring has abated. This may be the case, as VREB president, Mike Nugent, recently told the Times Colonist. “While evidence is anecdotal so far, it seems fewer Vancouver buyers with deep pockets are crossing the water to buy here.”
So good news all around. A return to more local fundamentals in Vancouver, and a possible stemming of the overflow into Victoria.
Update: Weekly numbers update while we wait for the VREB monthly report: