Mixed reviews for B.C.'s efforts to cool the hot housing market

VICTORIA - Real estate experts in British Columbia say the provincial government has started to build a strong foundation for more affordable housing with its latest budget measures, but opinion varies on expected outcomes.

Finance Minister Carole James moved to ease the province's housing crisis by introducing a new tax on property speculators, expanding and increasing a tax on foreign homebuyers and spending $6 billion to build affordable housing over the next decade.

Cameron Muir, chief economist at the Real Estate Board of B.C., says plans to help build 114,000 affordable housing units will offer much needed supply for rental and low-income properties.

But he says a tremendous undersupply of available homes in Metro Vancouver, Victoria and Kelowna, coupled with B.C.'s strong economy, will keep home prices from dropping.

Tom Davidoff, at the University of British Columbia's Sauder School of Business, says he hopes the speculation tax will help make the lower end of the market more affordable, particularly for condos.

He says the speculation tax makes a lot of sense in terms of economics because B.C. has high income and sales taxes, but low property taxes, which encourages vacationers to buy property and makes life more expensive for workers.

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