This article is written for https://realtyfocuz.com/(Real Estate Focuses Web Development Company) and shared by Restobox
The foreign buyer’s tax is no longer a barrier?
House pricing that had started showing cooling effects after the introduction of the foreign buyers’ tax in August 2016 is on the surge gain. Recently published price index shows that the real estate market in Vancouver is gradually shaking off the impact of the tax levied by the government and is on the rise once again.
Though it took nearly nine months shake off the impact, yet the changes are prominent. The House Price Index formulated by the Teranet-National Bank of Canada indicates that the average price of housing in Vancouver has grown 8.2% in the year-to-year averages and 1.4% in the month-to-month averages.
Statistics from 2016 show that the housing price index in Vancouver Metro had reached its peak point in the month of September, just a month after the new tax was levied on property transfer to foreign buyers and was at 252.30. Though the index has been fluctuating ever since the implementation of the tax, it was at its lowest in December when the index read only 242.64, a drop of nearly 10% in just three months.
However, things have changed quite a lot since then and the market has started recovering once more. In recent reports published by CREA (Canadian Real Estate Association), the composite price of homes in the region was near $941,000 in the month of April, which, incidentally, is the highest as far as records go. Though the composite value had undergone a drastic change from $933,100 to $896,000 in a matter of just five months from August to January, the reversal seems to be even faster.
Charts presented by Douglas Porter, an economist at BMO Economics, show that the house pricing remained rather stable during the eight months after the introduction of the foreign buyers’ tax – a glaring contrast to its behavior in the months preceding the tax when the growth was approximated at nearly 20%.
However, with the start of the ninth month, the trend started changing and an upsurge was seen. According to Teranet, the growth in house pricing in Vancouver which is presently at 8.2% is quite strong. However, when compared to the national trends, it was quite below the average.
Reports show that the housing market in Toronto had the maximum price growth as it jumped 3.6% in the month-to-month averages and became the highest change to be recorded in any month ever. In tune with the month-to-month averages, the year-to-year average also jumped by 28.73% in Toronto, a figure that tops all the other cities in the country.
However, according to expert opinions published in RealtyFocuz, the growth in house pricing in Toronto may recline when the Fair Housing Plan is implemented in Toronto. According to this plan, a tax of 15% will be levied on real estate transactions by speculators who aren’t a resident of the Greater Golden Horseshoe region that covers Peterborough, Niagara, and Toronto. However, experts fear that the impact of this plan may be as short-lived as it was the foreign buyers’ tax in Vancouver.
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