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Federal foreign buyers ban will do nothing for Victoria housing market: Real estate board

Victoria home prices have soared from a lack of supply
During the 2022 budget announcement on April 7, Ottawa announced a two-year ban on foreign home purchases in Canada. (Black Press Media file photo)

Victoria’s housing market will hardly be impacted by a ban on foreign property buyers, who make up a negligible portion of annual homebuyers in the city, according to the Victoria Real Estate Board.

During the 2022 budget announcement on Thursday (April 7), Ottawa announced a two-year ban on foreign home purchases in Canada. The measure is intended to cool the country’s housing market, which has some of the highest home prices in the developed world. In 2018, foreign buyers made three per cent of Vancouver property purchases.

However, foreign buyers are not responsible for increased prices in Victoria’s housing market, said real estate board president Karen Dinnie-Smith. In 2021, only half of one per cent of homes purchased in Victoria were bought outside of Canada. In 2019, prior to the pandemic, foreign buyers made up only one per cent of Victoria’s new homeowners.

“There’s this concept that there’s a lot of foreign buyers (in Victoria). But when you actually look at the stats (of property purchases and transfers) it isn’t borne out,” said Dinnie-Smith.

The Victoria housing market, which saw a record low 1,063 active listings last March, and a 26 per cent increase in the average single-family home price between February 2021 and 2022, has historically been local.

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“Our market revolves around itself. During COVID we have seen some buyers coming from other provinces, but again stats will show that a large percentage of buyers – around 80 per cent – are local.”

The decision of a foreign home buyers ban would have better come down to the province, said Dinnie-Smith. Provincial measures relating to housing demand – including taxes on foreign buyers, speculators, vacant properties and property purchases – have attempted to stifle interest in Victoria’s limited housing supply similar to the new ban. But they’ve not beeen effective in lowering prices.

Dinnie-Smith said that during the two years of the ban, the City of Victoria should double down on the legitimate bane of their housing market – an across-the-board lack of supply.

READ ALSO: B.C. housing sales slow amid ‘severely limited’ supply

“When I’m talking to the media I sound like a stuck record – I bring everything back to supply. But unfortunately, that’s our answer,” she said.

Dinnie-Smith said residents of Victoria can be pleased with the level of attention paid to housing in Thursday’s federal announcement. An additional $4 billion has been proposed to create a federal Housing Accelerator Fund, which could finance annual per-door incentives for municipalities, up-front funding for municipal housing plan investments and the hastening of new developments.

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