[andkon]

Here's some math that should make this make sense to non-Vancouverites:

A 1200sqft bungalow across the street from me sold for $2.8mm four months ago; it's now back on the market for $3.2mm. If you put 20% down, that'd be a monthly mortgage payment of $11,500. That's 1/6th of the average Vancouver family's annual income, per month!

I have a feeling that if you're paying $11,500 a month on your mortgage, you're not worried about 1% of the value of your house, and you're definitely not worried about renting it out at a profit. You're just hoping it keeps appreciating enough to pay for interest and this new piddly 1% tax.

That's who this tax is targeting. And I welcome it wholeheartedly.

[quickben]

Just thinking about this in a detached, mathematical sort of way. The increase or 400,000 over 4 months, is more than 1% of the value.

Depending on how crazy the market it, prices may jump even higher short term to accommodate the added speculation loss.

In any case, hopefully Toronto doesn't reach that level of insanity.

[zaroth]

So $3mm is basically retirement money, right? So why isn't everyone just selling and moving somewhere else?

This sounds to me like real Vancouver residents who bought years ago have just won the lottery. Boohoo my house is worth 10x what I paid?! Tell me more about your problems!

Seriously, cash in the chips and enjoy life until the crash and then move back in a few years, own your house outright, and, continue to enjoy life.

I mean, I don't want to be rude but I'm having trouble wrapping my head around this...

  Hey man, my house is worth like $4 million on Zillow.
  Yeah, that totally sucks, how are relatable people supposed to move in next door?
  Those Ferraris really have loud engines. It's a menace!
  How are we going to *fix* this?!
  We need the value of our homes to plummet back to equal or less than what we paid. I need noisy neighbors who can't afford landscaping, not just this eerie silence all up and down the street.
  For sure.

Please can you tell me how we can get these Chinese investors interested in some nice New England properties?!

[uw_rob]

I don't think the anger is people bought their home 20 years ago. It's from people who rent; people who grew up with their parents and want their own place in the city; people who have moved to the area for a job and cannot afford to live within a reasonable distance of work.

Having property that no one lives in despite people wanting to seems like a poor allocation of land. (Mind you, it may not be a poor allocation of resources for the people investing)

[ryanwaggoner]

A 1200sqft bungalow across the street from me sold for $2.8mm four months ago; it's now back on the market for $3.2mm.

That's incredibly frustrating, I get that. I'd love to live in the Bay Area again, but it's too expensive to be worth it to me.

What you're describing is a classic bubble. Speculation divorced from the underlying asset value. Presumably not enough Vancouverites would think that $3.2mm for a 1200 sg ft house is worth it to keep that value there. So it's temporary and will eventually pop. Bubbles hurt a lot of people while they run up and when they pop, but it's not clear that price controls do anything other than shift the pain elsewhere, usually while making it worse. I'd rather try and understand what's driving the underlying bubble and fix that if we can. The vacancy is a symptom, not a cause. That said, that's probably not something Vancouver can deal with directly, as it seems more tied to global macroeconomic conditions.

[orthecreedence]

> I'd rather try and understand what's driving the underlying bubble and fix that if we can

Foreign real estate investment? Driven by economic forces in foreign countries? I don't know if you can really "fix" that, but you can sure as hell tax it while it's happening. And 1% isn't bad at all if the houses are gaining that much in value over such a short period of time. Whoever's flipping these is certainly beating inflation still.

EDIT: Read some more comments, particularly emptybits':

> It's an experiment. Much like our recent 15% foreign buyers tax reported a few months ago. We're all watching the experiment. Perhaps our role is to serve as a lesson to other cities?

So it seems as though they are trying to curtail the bubble caused by foreign influence, and my comment about "fix"ing it was made in ignorance.

However, I still think it makes sense to tax both ends of the spectrum...the buyer tax limits new purchases, the "living here" tax limits houses already bought.