Real Estate Market In Vancouver At Risk Due To New Tax
Three weeks following the new 15 percent tax on foreign home buyers was introduced and later imposed in Vancouver, Fitch Ratings said there are high chances that the housing market in Vancouver is at a vulnerable point and there are possibilities of the rate of unemployment rising.
The report shows that when you look past the market getting better and cooling down, the data has shown that the sales of houses in the city has gone down and at a slower pace. This means if more people are out of jobs, the price of a house will eventually have to go down. A proposal has been made by Fitch to call for a 20 percent overvaluation in the housing market which would probably cause the prices to go down to a more reasonable amount.
The current situation involves sales being very sluggish. A report made by CREA showed that the sales in Vancouver have dropped by 21.5 percent since the month of February, while the rate of unemployment is on a rise. For the unemployment rate that keeps on increasing, it has not raised concerns as Vancouver has been experiencing massive growth in the availability of jobs although other metros haven’t been lucky enough.