There are two types of property buyers in the real estate market in Vancouver. One is the owner-occupiers who are planning to purchase the property in order to occupy it for themselves and their future. They basically are the residents of the Vancouver city. The other one is the foreign investor, especially the Chinese. Their objective behind property purchase is investment purposes.
To manage housing demand, certain policy measures have been forwarded by the recently selected British Columbian government. This includes an increase of foreign-buyer tax of British Columbia to 20% from 15% on the total purchase price of any house. Along with this, increase property taxes have been imposed on homes that have a total value of around three million Canadian dollars, those houses where the household income comes from international countries, on second and on empty homes.
These policy measures will mostly influence the speculative demand for houses that is the confidence of people. However, it was found that in 2016, around 2/3rds of the residents wanted house prices to decrease especially in the metropolitan area, involving half of the house owners. Around 1 person in 5 house owners wanted a decline in house prices at least thirty percent.
Some of the factors that had been common in between the large capital cities of Australia, such as Sydney or Melbourne and Vancouver are ‘tax on empty houses’ and ‘massive investments from China in real estate’. Over the past 5 years, there had been an increase in the numbers of empty property with 15 percent in Sydney and around 19 percent in Melbourne. In Australia, there has been significant growth with respect to public awareness of unused homes.
Outrage has been triggered by the dark spaces in newly built towards in cities like Melbourne, Sydney, Vancouver, and London. Similar to a foreign-buyer tax of British Columbia in Vancouver, Victoria’s tax of around 1 percent is applied as capital value change on empty homes. A similar tax is also applied to the middle and inner suburbs of Melbourne.
The two policy options that have been debated, recommended, or implemented in Australia in relation to this factor are ‘the missing middle policy – abolishment of the zoning factors’, and the ‘high-rise solution’ policy. As per the high-rise solution policy, it was advocated that the solution will be acquired through the construction of more high-rise houses. For high-rise development, huge areas were re-zoned by both of the cities, i.e., Melbourne and Sydney around the activity hubs and suburban transport and their respective inner cities. It was expected that in established suburbs, more opportunities will be created for medium density by this specific policy.