The post-foreign-buyer tax experience of the Metro Vancouver multi-family rental market is evidence of its sensitivity to foreign investors.
Considered income-producing commercial property by the Real Estate Board of Greater Vancouver, apartment buildings are ruled residential property by the B.C. government and subject to the new 15 per cent foreign sales tax.
In the first eight months of this year, 145 Metro Vancouver apartment buildings sold and the dollar volume increased 95 per cent from a year earlier to $1.3 billion.
Most analysts said a lack of inventory, not foreign buyers, was to blame for the increase, which saw prices of aging Kitsilano apartment buildings soar as high as $750,000 per suite.
Since the foreign-buyer tax was introduced, however, floods of apartment properties have hit the Metro market.
Mark Goodman of HQ Commercial – one of the leading multi-family agents in Vancouver – said that since Aug. 1 he has been fielding non-stop calls from apartment building owners trying to sell.
“Something is shifting. In my 15 years, we’ve never had this many proposals [to sell] on the go. Twice a day, every day for three weeks we have been getting calls from apartment owners, land owners. There is a rush to get apartments on the market,” Goodman said.
Yet, Goodman does not see a link with the foreign-buyer tax. “Only two of my last 60 buyers were foreign buyers,” he said.
He agreed, though, that since Aug. 1, many Metro Vancouver landlords coincidentally and synonymously became convinced that prices had peaked and they should cash out.
