In a radical move, the Canadian city now charges an extra 15% to any overseas investor buying property there. The short-term impact on Vancouver house prices has been startling but will it last?
There is a city which is suffering a worse property bubble than Sydney, whose residents are more priced-out than Londoners, and where there is a greater divide between the housing haves and have-nots than even San Francisco.
That city is Vancouver, and in response to these mounting challenges, the west-coast Canadian metropolis recently imposed an extraordinary new tax on foreign buyers whose impact is now being watched closely by other cities grappling with bloated property markets.
On 2 August, Vancouver introduced a tax on anyone from outside Canada wanting to buy a home in its super-heated market. In future, city authorities said, if you werent Canadian, you would have to pay an extra 15% on the purchase price.
The impact has, by some measures, been more startling than campaigners could have hoped for. The price of the average detached home reportedly slumped by an astonishing 16.7% in August alone to C$1.47m (856,000), according to the Real Estate Board of Greater Vancouver. Some agents are reporting that the market has gone from red hot to stone cold in a matter of weeks.
British Columbias premier, Christy Clark, who introduced the tax, told reporters there will be no going back on it. The prices were going up way too fast and if we helped slow that down, thats good, she said.
In the year before the tax, prices in the city were galloping ahead at a rate of 39% a year amid widespread concern that investors, from China in particular, were pricing out local residents.