When a week ago we reported that in a long-overdue decision, the British Columbia government finally cracked down on Vancouver's unprecedented "Chinese hot money" driven housing bubble by implementing a 15% property tax (which we hadadvocated for one month earlier), we said that "with today's tax, Vancouver's real estate nightmare in which local housing had become the "new normal" anonymous Swiss bank account, and also made real estate virtually unaffordable to local, hard working Canadians, is finally set to end."
However, not even we were confident that a 15% tax would be "prove to be a sufficient deterrent to future Chinese buyers." Now thanks to the Financial Post we now know that not only was the tax sufficient, but it has led to the prompt, much anticipated, and generally welcome bursting of the Vancouver housing bubble.
As FP writes, on Thursday and Friday of last week, realtors and lawyers were desperate to get in under the tax hike deadline, and filed a record-setting 15,000 property transfer applications on the last two business days before B.C.’s punishing new 15-per-cent tax on foreign property buyers went into effect. As a result, more than 9,200 transactions were filed on Friday, breaking the 2007-2008 record of more than 8,400 in a single day, according to the B.C. Land Title and Survey Authority. It also reported over 5,800 transactions on Thursday, representing nearly as many deals registered at month’s end in April.
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