Soaring housing prices have been a serious challenge in Canada for years now. Different stakeholders have also made numerous proposals, and part of this vague picture of possible solutions includes foreign and speculative investment issues. Below are some discussion points on this matter, as well as their relevance to the construction management industry and other relevant issues.
The first two items in the British Columbia 30-point plan for a fairer housing market read as:
- Taxing speculators who are driving up housing costs
- Increasing the foreign buyers tax rate to 20%
These actions, while intended to be part of the solution, are still being hotly debated today by different critics. Reactions from British Columbians have also been solicited, and a Mustel Group’s survey says that the British Columbians support measures to reduce speculative investment. From this point of view, it would seem like the movement to impose tax on the speculators is just the right option.
On another note, boggling questions have also been laid down to challenge these actions. For instance, some are very keen in asking if foreign investors are the ones driving the prices of housing. This question surfaced in lieu of increasing foreign real estate investment, especially that of China, whose outward real estate in general increased more than 200-fold in 2014, based on a University of Alberta occasional paper series report by Kerry Sun.
Construction Management Industry
Another part of the 30-point plan includes investing $6 billion-plus investment in affordable housing, which falls under the general direction of “building the homes people need.” This hefty investment was labeled as the largest one poured by the government for housing affordability. With such investment, more housing developments are expected and thus, increasing housing supply. When this path is pursued, construction management industry can play a big part in boosting the housing supply in the country.
Data is the Key
In the same 2015 report by Kerry Sun, it was argued that there is a need to have a better set of data to help guide all the stakeholders to the proper direction of housing in Canada. This is true especially when we are talking about foreign investment on real estate. It says that while foreign investments could affect the housing market of the country, the degree of effect can vary. Hence, enhanced collection of different foreign investment-related data, such as policies, can serve as a grease to ease the rough-and-tough decision-making for Canada’s real estate industry.
The 30-point British Columbia covered some parts of the data collection aspect of the housing crisis. Relevant points in the plan include:
- Taking action to end hidden ownership, including a new beneficial ownership registry
- Expanding information collection and information sharing with federal government to prevent tax evasion
Actions are indeed being taken by different stakeholders, but the crisis, of course, will not vanish in an instant. One thing is for sure – all eyes are in this predicament. The real estate industry in Canada might continue to be on fire in the coming years, but all hopes are toward its betterment.