{"id":707,"date":"2016-09-21T21:28:43","date_gmt":"2016-09-21T21:28:43","guid":{"rendered":"http:\/\/www.chrisbrownrealestate.ca\/blog\/?p=707"},"modified":"2016-09-25T22:29:26","modified_gmt":"2016-09-25T22:29:26","slug":"vancouver-home-prices-will-be-higher-this-time-next-year-leading-economist","status":"publish","type":"post","link":"https:\/\/www.chrisbrownrealestate.ca\/blog\/vancouver-home-prices-will-be-higher-this-time-next-year-leading-economist\/","title":{"rendered":"Vancouver Home Prices Will Be Higher This Time Next Year: Leading Economist"},"content":{"rendered":"
\"Left<\/a>

Left to right: Tom Davidoff of UBC, Helmut Pastrick of Central 1 Credit Union and Tsur Sommerville of UBC listen to Arnon Dachner of Dentons at the UDI’s September16 lunch panel on the Foreign Buyer Tax \u2014 Ryan Broda Photography<\/p><\/div>\n

Foreign buyer tax has resulted in \u201cpolicy shock,\u201d but market will quickly recover to see prices higher than they are now, predicts Central 1 Credit Union chief economist<\/h3>\n

The \u201cpolicy shock\u201d of the new foreign buyer tax has created a \u201ctemporary market disruption\u201d that will play out over the next three to six months, after which \u201cmarket fundamentals\u201d will mean the market recovers, according to a leading economist.<\/p>\n

Speaking to a sold-out audience at the Urban Development Institute<\/a>\u2019s Foreign Buyer Tax luncheon and panel debate September 16, Helmut Pastrick, chief economist at Central 1 Credit Union, said that he expects house prices to recover so that they are higher this time next year than they are today.<\/p>\n

Pastrick said, \u201cI fully expect September\u2019s sales to be down again, year-over-year, probably by 30 or 35 per cent compared with last September. The average price will probably fall again, relative to August, and this will play out over the next three to six months \u2013 it\u2019s a temporary market disruption.<\/p>\n

\u201cAfter the market has absorbed this new tax regime, we will begin to see other market fundamentals come into effect. Prices will then continue to rise, and they will be higher this time next year.\u201d<\/p>\n

Pastrick\u2019s fellow panellist at the UDI lunch, Tsur Sommerville, associate professor at UBC\u2019s Centre for Urban Economics and Real Estate, added, \u201cIn other markets where a foreign buyer tax was introduced, such as Hong Kong and Singapore, in both those markets, prices continued to rise.\u201d<\/p>\n

Pastrick said later in the discussion, \u201cI think home prices will begin to increase again, but at a slower rate. I expect to see higher prices until this economic cycle comes to an end, as all cycles do\u2026 But recessions only last a short while, and the cycle begins again. And in the long term, I would expect that over the next two or three decades, [Vancouver real estate] prices will double again, if not more than double. But there will be more economic cycles between now and then.\u201d<\/p>\n

He added, \u201cRight now we don\u2019t see any signs of an economic recession due to a shock event \u2013 we\u2019re in a strong economic cycle.\u201d<\/p>\n

Sommerville added, \u201cIn terms of the demand side, you\u2019ve got the combination of the strong economic cycle, low interest rates, and a demographic profile where you\u2019ve got a large number of young people ramping up into home ownership. There are more Millennials than any other group, so you\u2019re going to have a huge increase in housing demand, in a market where the ability to respond on the supply side is securely constrained.\u201d<\/p>\n

Sommerville\u2019s colleague Tom Davidoff, associate professor at UBC\u2019s Sauder School of Business, who was also on the luncheon panel, said that despite the strength of the economy and demand, there was still a significant risk of a sharp correction in home prices due to the foreign buyer tax.<\/p>\n

He said, \u201cA potential collapse in foreign buyer demand\u2026 could result in a less-bad version of what happened in the United States [in the sub-prime crisis of 2008]. There is a significant risk of an over-correction in prices \u2013 but I wouldn\u2019t say that is the most likely outcome.\u201d<\/p>\n

The fourth member of the panel was lawyer Arnon Dachner, a partner at Dentons LLP, who warned delegates that tactics to avoid paying the foreign buyer tax \u2013 even seemingly legal approaches, such as contract reassignment \u2013 could be defined as an \u201cavoidance transaction\u201d that could leave the party still liable for the payable tax or other monies lost to the BC government.<\/p>\n

The panel debate was moderated by Neil Chrystal, president and CEO of Polygon Homes<\/a>, who recently told REW.ca<\/em><\/a> that that he thought the overseas buyers\u2019 tax was \u201cmorally and ethically wrong\u201d and added, \u201cI wouldn’t be surprised if it was challenged legally.\u201d<\/p>\n

read more:\u00a0http:\/\/www.rew.ca\/news\/vancouver-home-prices-will-be-higher-this-time-next-year-leading-economist-1.2346757<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The \u201cpolicy shock\u201d of the new foreign buyer tax has created a \u201ctemporary market disruption\u201d that will play out over the next three to six months, after which \u201cmarket fundamentals\u201d will mean the market recovers, according to a leading economist. <\/p>\n","protected":false},"author":2,"featured_media":708,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"footnotes":""},"categories":[147,32,54],"tags":[244],"class_list":["post-707","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing-in-real-estate","category-market-stats","category-real-estate-news","tag-new-foreign-buyer-tax"],"_links":{"self":[{"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/posts\/707"}],"collection":[{"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/comments?post=707"}],"version-history":[{"count":2,"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/posts\/707\/revisions"}],"predecessor-version":[{"id":714,"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/posts\/707\/revisions\/714"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/media\/708"}],"wp:attachment":[{"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/media?parent=707"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/categories?post=707"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/tags?post=707"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}