HOT PROPERTY
Robinson talks real estate
Despite the economic uncertainty brought by the pandemic, B.C.'s real estate market is heating up, with record-low interest rates fuelling the fire.
Single-family homes are attracting bidding wars and selling for way over asking, which has the B.C. Real Estate Association predicting 2021 sales will be on par with the halcyon days of 2016.
This raises questions about whether the B.C. government's attempts to cool the market — partly through the foreign-buyers tax, and speculation and vacancy tax — have failed.
Finance Minister Selina Robinson, who was the housing minister before October's election, said the situation for first-time buyers and renters would be even more dire if the NDP government didn't bring in policies to temper prices.
Robinson sat down with Postmedia News to talk about the pandemic's impact on the housing market, interest rates, and investments in student and subsidized housing:
Q Looking at what's happening with B.C.'s market, what does that say about whether the government's policies have actually been able to temper prices so that first-time homebuyers can afford to buy a house?
A We are absolutely seeing some sharp increases in housing.
Due to the pandemic, it has a real impact for people in British Columbia.
Pre-pandemic, I think it's important to note we were making real progress, and if we hadn't made that progress it would be that much worse because the pressures would be that much more severe.
There are absolutely measures that we had taken pre-pandemic that have turned thousands of empty homes into rental units. For example, we brought in the foreign-buyers tax, which has helped moderate demand before the pandemic. And certainly the speculation and vacancy tax we know has turned thousands of empty homes into rental units.
And the other element of course is the low interest rates. That leads to an increase in appetite. So we are monitoring that very carefully.
Q Are the rising prices an indication that the speculation and vacancy tax hasn't worked the way it should? Has it had any measurable impact on cooling the market?
A When we put together our 30-point plan, it was because there was no one thing that was going to fix the market. The market was skewed because the previous government frankly didn't do anything. They just said the market is the market and as government we're not going to do anything.
We have a different approach. We said the market isn't sustainable in this way.
People are being left behind and we need to address what's going on. That 30-point plan includes building housing that people can afford. The Housing Hub, the new program of B.C. Housing, is working to build middle-income workforce housing and putting together billions of dollars over 10 years to build subsidized housing for people who can't access market housing at all.
The speculation and vacancy tax, the intent of it, was to bring online housing that was sitting empty. They were acting as safety deposit boxes in the sky and weren't being rented out.
We said if you're going to have an investment tool like this, then you need to pay the tax or rent it out. What we found is we've gotten 18,000 new units into the rental market as a result of the tax, which is a good thing.
Q How has Ottawa's low interest rate policy, which has ignited the market, impacted the provincial government's housing affordability strategy? Are there any policies B.C. can bring in to address this?
That's a federal issue. And this is always the tension around interest rates. From what I've heard out of the federal government there isn't a significant appetite to increase interest rates given where we're at in the pandemic. These are some of the challenges we have in British Columbia. We're working across governments — the federal government is finally at the table for (affordable) housing, which is a good thing.