What Vancouver’s property cooling measures can teach Hong Kong: it needs an arsenal of weapons

Patrick Blennerhassett says the Hong Kong’s government’s proposed vacancy tax is a step in the right direction, but it will take more than that to cool the property market

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Published: 2:30am, 27 Jun 2018Updated: 2:30am, 27 Jun 2018

When the City of Vancouver’s empty homes tax came into effect at the start of 2017, pundits and sceptics largely agreed it would be like putting a Band-Aid on a bullet wound. The move forces homeowners to pay 1 per cent of the assessed value of residences not being rented or used for at least six months of the year in periods of 30 or more consecutive days. This might be the model considered for Hong Kong’s proposed vacancy tax.

But this year, Vancouver’s real estate market has taken a downward turn after years of growth and record-breaking numbers.

Canada’s housing market and rental rates had been rising exponentially for close to a decade while vacancy remained at an all-time low. The issue of housing affordability has become Vancouver’s – and Toronto’s – calling card, pushing the opioid crisis out of the spotlight.

A new provincial leader from the New Democratic Party was voted in last May, cobbling together a coalition government on the promise of putting renters and local buyers before sellers, developers and international investors when it came to real estate. The recently announced measures by this left-leaning government bent on bringing affordability back to the real estate industry have dramatically dampened sales across British Columbia and vacancy rates have gone up.

The question is, how much of a role did Vancouver’s empty homes tax play in the cooling?

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