Langley Township is one of the fastest growing municipalities in B.C.
Home to 116,000 people, the Township is expected to double in population over the next 30 years.
But are Canadians’ ability to buy homes in the Langley Township and Langley City being negatively impacted by foreign investment in local real estate?
This is a question being pondered after, on July 28, the B.C. legislature passed legislation that institutes a foreign buyer tax.
This tax, which came into effect Tuesday, targets foreign owners and is in response to rising fears about housing affordability as Metro Vancouver land prices soar.
Langley Township Mayor Jack Froese said time will tell whether or not the tax will affect the real estate market locally.
“As far as the tax goes, it’s too early to tell if that’s a good thing or not,” Froese said. “I’m pretty neutral on it.”
Froese said the Township hasn’t heard of the type of real estate ownership seen in Vancouver, where homes are being bought and left vacant.
“We aren’t seeing places left empty, however, certainly the pressure that’s happening in points west – Vancouver, Richmond – are pushing people this way, so it has a domino effect,” he added.
With this type of demand, comes soaring price jumps.
The benchmark price for a detached house in Langley in June was $843,300, a 37.8 per cent increase in price from June 2015.
The benchmark price represent a typical property within each market.
Langley townhouses, at $408,400 (benchmark price) in June, jumped 36.9 per cent in price from last June.
And local condos, with a benchmark price of $238,800 in June, were on average 21.2 per cent more expensive than they were the same time last year.
According to a report recently released from the B.C. government, real estate investment from foreign nationals equalled $390,054,349, or 5.1 per cent of the market, from June 10 to 29.
Of the 5,118 property transactions in Metro Vancouver during those aforementioned 19 days in June, there were 260 deals with foreign buyers and 234 of those or 4.6 per cent declared Chinese citizenship.
No other country accounted for more than 0.1 per cent of transactions, and Korea, Taiwan, India and Romania were the next highest sources.
A total of 337 purchases by foreign nationals were made province-wide.
According to Royal Pacific Realty Group, the largest independent real estate firm in Western Canada, foreign buyers do not top the list when it comes to challenges for people looking to buy a home.
“The first hurdle is saving a down payment in a region where incomes continue to lag far behind home prices. The second hurdle is finding an affordable home in a market where demand for lower priced units far exceeds supply,” said Andrew Peck, vice president and general manager, Royal Pacific Realty Group.
The Royal Pacific Realty Group does not believe taxing foreign buyers will not make home ownership more affordable for first-time home buyers.
The group believes the solution lies in bringing in comprehensive housing policies which will increase the supply of more affordable homes. In other words, making sure home ownership is within the reach of first-time buyers should be a top priority with the government, noted the group.
“The government needs to increase the supply of medium-density, ground-oriented family housing,” Peck said.
Royal Pacific Realty Group includes more than 1,200 real estate professionals working through four offices in the Lower Mainland.
– Files from Jeff Nagel, Black Press