Nearly 5 pct of Vancouver homes deemed vacant amid housing crunch

Published 2018-03-07, 04:54 p/m
© Reuters.  Nearly 5 pct of Vancouver homes deemed vacant amid housing crunch

By Nichola Saminather

TORONTO, March 7 (Reuters) - About 5 percent of Vancouverhomes stood empty or underutilized in a city grappling withskyrocketing home prices and soaring rents, according to datareleased on Wednesday, making their owners subject to aso-called empty home tax.

The western Canadian city has rolled out a raft of measuresto cool a red hot market and improve housing affordability inthe country's most expensive real estate market. In February,British Columbia outlined a new housing strategy, includingraising its foreign buyer tax. 4.6 percent, or 8,481, homes in Vancouver stood emptyor underutilized for more than 180 days in 2017, according tohomeowner declarations submitted to the municipality.

The city received 183,911 property status declarations,representing 98.85 percent of home owners, the City of Vancouversaid in a statement. Properties deemed empty will be subjectedto a tax of 1 percent of their assessed value.

"This is not insignificant, considering that the rentalvacancy rate is less than 1 percent in Vancouver," said RobertHogue, senior economist at Royal Bank of Canada. "This kind ofdata is completely new, so it is difficult to put into context."

Foreign buyers, mainly from China, have been blamed forVancouver's hot property market, where the gap between homevalues and incomes has widened rapidly in the last five years,hitting levels well above any other major Canadian city.

Before the foreign buyer tax, sales agents said investors inHong Kong, China and other parts of Asia were acquiring up to 40percent of Vancouver condo projects marketed abroad, absorbingthe more expensive units that domestic buyers could not afford. 61 percent of the empty homes were condos, and othermulti-family properties made up almost 6 percent, according tothe statement. More than a quarter of the empty properties werein downtown Vancouver.

Property owners who did not submit a declaration and thosethat claimed exemptions, such as for renovations or if the ownerwere in hospital or a long-term care facility, were included inthe empty homes number.

The 2016 census reported that 21,820 homes were unoccupiedin Vancouver but that included homes at which no one wasavailable on census day, so overstates the issue, RBC's Hoguesaid.

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