B.C. renter sees little in federal budget to put home ownership in reach
Real estate watchers say foreign buyers ban will do little to cool overheated market
People who study B.C.'s red-hot housing market are skeptical new federal rules announced Thursday will do much to make home ownership more affordable for people in the province.
The Liberal government made tackling sky-high housing costs across the country the centrepiece of its 2022 budget plan, with a pledge to double the pace of new home construction, the creation of a tax-sheltered, first-time home buyers saving account and a two-year ban on foreign buyers.
But Ashley Pirhonen, a 30-year-old renter in West Kelowna, says she's not sure any of the changes will move her any closer to home ownership.
"It seems like the [budget] is not geared toward people like me who are not able to actually save to buy a house because our cost of living is so high," she said.
Pirhornen commutes 45-minutes one-way from West Kelowna to her job in Penticton because she isn't able to find a place to live closer to where she works. Between rent, gas and student loan payments, she says, she doesn't have enough money left to put aside to save for a home.
"When your rent goes up by 50 per cent, it really eats into the amount of money you have left."
Highest rental costs in the country
British Columbia is home to some of the highest rental costs in the country. According to data from rentals.ca, Vancouver and Victoria top the list of unaffordable rental markets with a single-bedroom unit in Vancouver going for an average of $2,239.
Even smaller cities like Kelowna and Prince George have seen costs skyrocket in recent years as vacancy rates drop in almost every major city in the province.
Andy Yan, an urban planner and adjunct professor at Simon Fraser University, said for most people struggling with affordability, the foreign buyers ban was unlikely to make a difference — particularly because it includes exemptions for students, refugees and foreign workers, which he said created loopholes for foreign investment to continue make its way into the market.
"The issue in metropolitan Vancouver isn't necessarily foreign buyers, it's foreign money," he said. "I think this is a missing gap."
Tom Davidoff, an associate professor at UBC's Sauder School of Business, said the foreign buyers ban might cool certain sub-markets where foreign buying is a factor but was unlikely to make a larger difference.
Instead, he said the focus should be on taxing people who hold onto secondary properties that aren't part of the rental market, regardless of their nationality.
"Let's compare [a Canadian] who owns a second home in an expensive city to a foreigner who buys an apartment and then rents it out," he said. "The foreigner who rents out the apartment isn't really hindering affordability, but the Canadian with the second home is."
In fact, a Statistics Canada report found that less than five per cent of homes in Vancouver were owned by non-residents.
Prihonen pointed out that, for the most part, foreign ownership didn't seem to be the issue preventing her from finding a place to live — instead it was a lack of affordable housing supply.
"It really seems the foreign buyers are buying more luxury properties rather than starter homes," she said. "We're not really in the same market."
To that end, the budget has set aside around $10 billion across various initiatives to increase housing stock across the country.
That includes $4 billion for a housing accelerator fund to create up to 100,000 new units over five years.
But Tsur Somerville with the Real Estate Foundation of B.C. points out that means there's only $40,000 of investment per unit, which he doesn't expect will translate to new housing.
Jill Atkey of the B.C. Non-Profit Housing Association warned the investment may only translate to about 1,000 new units in B.C. at a time when the low-end rental market is rapidly disappearing.
"For every new unit that the federal government is investing in, we're losing 15 units across the country," she said.
One area that did receive praise was the government's promise to introduce a Home Buyer's Bill of Rights that would include a ban on the practice of forcing potential home buyers to make an offer on a property without knowing what others are bidding.
"This opportunity is well timed and well suited for our market," said Jeff King, CEO of the Real Estate Board of Greater Vancouver, in a news release this week.
Ottawa has pledged more than $10 billion towards housing across Canada. But as <a href="https://twitter.com/jonvhernandez?ref_src=twsrc%5Etfw">@jonvhernandez</a> tells us, critics say it will do little to ease affordability challenges in places like Metro Vancouver. <a href="https://t.co/ejTV55kGHk">pic.twitter.com/ejTV55kGHk</a>—@cbcnewsbc
With files from Pete Evans, Rafferty Baker and Jon Hernandez