Gregor Robertson warns Vancouver's economy at risk due to housing prices

Gregor Robertson says recent reports and recommendations from banks, real estate boards and economists has made it clear to him that it's time to deal with Vancouver's sky-rocketing real estate prices or the city's economy could suffer.

Housing prices 'completely disconnected from local incomes,' mayor says

Gregor Robertson says he's worried Vancouver's economy will suffer if the provincial and federal governments do not legislate new taxes to stall ever-rising house prices in the city. (CBC)

Gregor Robertson says recent reports and recommendations from banks, organizations, real estate boards and economists has made it clear to him that it's time to deal with Vancouver's sky-rocketing real estate prices or the city's economy could suffer.

On Sunday he released a statement amplifying his support for a house flipping tax as a measure to reduce speculation and a luxury sales tax to help, "rein in the excesses of Vancouver's housing market."

"First and foremost, housing needs to be for homes, not just treated as a commodity," said the statement.

Robertson has found convergence from multiple sources, all calling for something to be done about the state of prices for housing. This week the price tags for detached houses were shown to have increased 37 per cent since last year according to Real Estate Board of Greater Vancouver.

"These trends are not sustainable and we need to be wide awake to the risks they pose to the stability of our economy, let alone the impact they have in pushing local residents, especially young people, families, and seniors, out of our neighbourhoods," said Robertson.

In his statement he listed calls from Scotiabank and the National Bank of Canada for the federal government to intervene and an OECD report that warned Vancouver's economy is at risk due to rising household debt.

"With unregulated, speculative global capital flowing into Metro Vancouver's real estate, we are seeing housing prices completely disconnected from local incomes," said Robertson.

In February the provincial government announced measures that will require people buying homes to disclose their citizenship as there is little agreement on how much housing in Vancouver is foreign-owned.

Robertson says he will "aggressively advocate" for a flipping and luxury tax to be used as a way to "help create a level playing field in the Vancouver housing market."

Last June, the provincial government rejected calls from Robertson to levy speculation and luxury taxes on foreign owners and speculators as a way to keep prices from rising.

Premier Christy Clark said at the time that using taxes to drive down prices could hurt current homeowners by reducing their equity.