Hacker News Reader

Comment by pjc50 | Hacker News Reader

Not everyone is mortgaged - quite a lot of the price rises are driven by foreign capital flight. A few places have figured this out and decided to tax it: https://www.bloomberg.com/news/articles/2018-02-20/british-c...

View on HN

I've noticed this annecdotally when trying to buy a home on separate occasions in the New York and LA metro areas. I'm not sure it's foreign capital, but the majority of winning bids were all cash offers above the asking price.

I'd love to see a retrospective analysis on Vancouver's protective measures to see if they did actually help, or if buyers found loopholes, or it wasn't Chinese buyers to begin with.

I wish I could find the link now, but someone did a study on Vancouver and found that the tax had no effect on housing prices. The foreign buyers simply added it as another cost of parking their money outside of their country (usually China) and the math still worked in their favor.

It brought in some extra money to Vancouver though.

Of course it’s impossible to say with complete certainty, but... Vancouver’s housing market has stalled since the foreign buyer tax and vacancy taxes started to bite. Inventories are high and stubbornly stuck there rather than falling as they do toward the end of the year. Prices on high end homes are down a great deal - 20-30% for homes priced higher than $3M.

I would say that at this early stage it looks like the new taxes are working precisely as intended.

I think the confounding factor is that the tax would move the market whether or not foreign buyers are an issue. The price drops are also mostly at the top end of the market, which benefits wealthy buyers.

The drops are starting to happen lower down as well. The market stall is across the board.

Seattle's housing market has stalled too, with no tax introduced.

Not an "analysis", but here's the last (?) HN discussion on Vancouver's housing market https://news.ycombinator.com/item?id=14608918

I mean, yeah, some people don't borrow money to buy a home, but the vast majority (87%) do. A few years ago it was as high as 93% of homes were purchased with a mortgage.

https://smartasset.com/mortgage/what-is-the-typical-down-pay...

Reply on news.ycombinator.com