Tuesday, March 8, 2016

Smyth: House price shock sparks action by Port Coquitlam city councillor

Smyth: House price shock sparks action by Port Coquitlam city councillor

 

Councillor says other cities, B.C. government should tackle issue

 
Brad West was visiting his mom at the Port Coquitlam home where he grew up, noticed a house for sale down the street and became curious.
So he dropped by an open-house event and was shocked to discover the asking price: $1.1 million.
“I couldn’t believe it,” said West, a 30-year-old Port Coquitlam city councillor.
“We’re talking about a neighbourhood always known for its affordability, a place where a young family could buy a modest house with a modest backyard. That’s how my parents could afford to buy there when I was two years old.
“But now a house on that street sells for over a million dollars! How can anyone around here afford it?”
The answer is that very few people “around here” can. But West said the real estate agent showing the home gave him a frank assessment of the market.
“He told me he expected the house to sell for well above the asking price. The house next door had just sold for over a million with multiple bids.
“I asked him, ‘How is that possible in this community? Who has that kind of money?’
“He told me, ‘The overseas demand is so huge it’s irrelevant what the local demand is. Offshore money is driving the market.’”
Welcome to the Vancouver real estate affordability crisis, suburban style.
“People think this is just a Vancouver problem, but it’s quickly becoming a Lower Mainland problem and will soon become a provincial problem,” West said.
Now Port Coquitlam is taking action. A city hall committee has asked staff for options on tracking non-resident home purchases and what the city can do to control them.
West is calling on other municipalities and the provincial government to take action, too.
“There’s been a total failure of leadership on this issue by all levels of government,” said West, who supports an anti-speculation tax and restrictions on non-resident foreign buyers.
He points to reforms in Australia, where the government can order the resale of homes purchased in contravention of foreign-buyer limits.
He also points to the astonishing flight of private capital out of China: a record $550 billion last year, according to the Institute of International Finance.
The Christy Clark government has shown little interest in restricting offshore home purchases, and West wonders about a possible reason why: generous corporate donations to the governing Liberal Party by the real estate sector.
“You can easily picture pressure on government by a real estate industry that’s very happy with the status quo,” he said.
“They’re probably saying to the politicians, ‘This is great, people are making lots of money, just leave it alone.’
“But we can’t leave it alone unless we want a society where only the very wealthy can afford to buy a house.”
Strong points all around. But unless pressure continues to increase — especially if the debate threatens to blow up into a major election issue — the B.C. government won’t budge.