Vancouver mayor calls on province and feds to rein in ?excesses? of housing market
GORDON HOEKSTRA
The Vancouver Sun
Vancouver Mayor Gregor Robertson urged the provincial and federal governments on Sunday to heed warnings from the financial sector to cool Metro’s red-hot housing market.
In a written statement, Robertson said clear measures are needed to “rein in the excesses of the city’s housing market.”
The Bank of Nova Scotia and the National Bank of Canada recently said the federal government should take more steps to intervene to stop the rapid rise in housing prices in Vancouver and Toronto. That rapid rise has been blamed on factors such as low interest rates, a tight housing supply, a low Canadian dollar and foreign investment, particularly from mainland China.
Scotiabank CEO and president Brian Porter has said the government could consider measures such as raising down payments, increasing the qualifying rate for five-year fixed mortgages and imposing a temporary luxury tax on foreign buyers.
National Bank of Canada CEO and president Louis Vachon has also said Canada should eventually increase minimum down payment requirements for mortgages.
Robertson also noted that Benjamin Tal, the deputy chief economist at CIBC World Markets, had suggested a flipping tax could reduce foreign speculation. However, Tal has also said it is no replacement for proper data on foreign investment.
“I support both these tools (luxury and flipping taxes) and will continue to aggressively advocate for them to the federal and provincial governments as a way to help create a level playing field in the Vancouver housing market,” said Robertson.
The mayor is heading to Ottawa this week, but the main item on his agenda is not housing but communicating the city’s opposition to Kinder Morgan’s proposed $6.8-billion Trans Mountain oil pipeline expansion.
The most recent figures from the Real Estate Board of Greater Vancouver show prices nearly 30 per cent higher in May, at $899,100 for a Metro Vancouver benchmark, than the same time last year.
The Department of Finance has said in a statement to Postmedia that it is watching what is going on in the housing market and “prepared to take further action if required,” but that there are no measures planned for now.
Last year, Ottawa raised the down payment on the portion of homes over $500,000 to 10 per cent from five per cent. On June 10, the B.C. Liberal government will start using a new property transfer tax form that asks for a buyer’s principal residential address and whether he or she is a Canadian citizen or permanent resident.
This spring, the province also raised the property tax exemption on new homes to $750,000 from $475,000 and increased the tax on homes over $2 million to three per cent from two per cent. It was called a half measure by critics.
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