When news first emerged last spring of Ottawa’s looming ban on foreign home sales, alarm bells sounded in Whistler, as they did in other resort communities that tend to attract well-heeled international buyers.
That concern, as it turns out, was for naught, with the federal government announcing just days before the ban was to go into effect Jan. 1 that recreational properties would be exempt from the ban. The two-year ban on non-resident buyers, aimed at improving housing affordability for Canadians, also doesn’t apply to foreign nationals with temporary resident status; workers who have worked and filed tax returns in Canada for at least three out of the four years prior to purchasing a property; and international students who meet certain requirements, including having spent the bulk of the past five years in Canada.
The 11th-hour exemptions have led to new questions for Whistler, however. Namely, whether the resort can expect a rush of international sales after two years in which foreign buyers mostly stayed out of the market due to COVID-related travel restrictions.
According to local realtors Pique spoke with, not likely. Given the longstanding development cap in place limiting inventory, combined with the resort’s strong reputation as an outdoor destination continuing to drive demand, the kind of speculative foreign investment that the ban is meant to address doesn’t apply locally to the same extent, explained Matt Chiasson, co-owner of RE/MAX Sea to Sky Real Estate.
“There are other places in Canada that if you were just dumping money, there are places to put it,” he said. “In the next year, if there are a bunch of people trying to park money in Vancouver, could that trickle to us? We’re going to keep an eye on that. I don’t see it, but it’s possible. I just don’t. I’m not used to dealing with buyers who just want to dump money in something; they want to buy because they want to be here.”
B.C. is already less likely to attract international buyers, since the provincial government introduced its non-resident buyer tax in 2016, said housing expert Thomas Davidoff, associate professor at UBC’s Sauder School of Business.
“I don’t see it having a huge impact in British Columbia, because with the foreign- buyer tax, we already have a small fraction of foreign buyers here,” he said.
An amendment to the Property Transfer Tax Act, the tax imposes an additional 20-per-cent transfer tax on residential property purchased by foreign buyers. While the tax, along with the vacancy and speculation tax in place province-wide, has reduced the number of foreign buyers in B.C., they were “too limited in scope to halt the recent real estate frenzy fuelled by low interest rates,” wrote the BC Real Estate Association in March of last year.
Between the strength of the U.S. dollar and the relative affordability of Canadian vacation homes compared to those south of the border, some housing experts anticipate an upswing in sales activity in certain markets, particularly smaller rural enclaves. A November survey of American buyers living in border states by Royal LePage found that three-quarters of those with recreational property in Canada bought after the Liberals announced plans in April for the incoming ban.
“With its world-class skiing resorts and picturesque winter landscapes, Canada will remain a desirable location for recreational buyers from all over the world,” read a statement last week to Global News from Pauline Aunger, broker at Royal LePage Advantage Real Estate.
Indeed, Whistler has already seen a rebound in international sales since the height of the pandemic, especially from the historically strong American market—but, as a general rule, foreign buyers still only make up a fraction of Whistler’s real estate sales. In the past decade, the highest proportion of international buyers in a given year came in 2018, when foreigners made up 17.7 per cent of transactions, led by U.S. buyers, who represented nearly 10 per cent of all sales made. In 2021, when travel restrictions remained in place for much of the year, the percentage of foreign buyers fell to just 4.1 per cent. That trend was on the upswing last year, with foreign buyers accounting for 10.66 per cent of sales.
“I think a lot of Americans are disillusioned with what’s going on in the U.S., so we might see an increase in desire there,” said Ann Chiasson, also a co-owner of RE/MAX Sea to Sky Real Estate.
With fewer markets to invest in with the foreign buyer ban in place, one thing to keep an eye on, Ann noted, was the potential for money laundering, something the Whistler market hasn’t seen much of historically, according to the realtor.
“This is where we’re going to have to be very cognizant of people who are looking to launder money. They may look at Whistler because it’s an option now. As real estate agents, I think we have to be a little more diligent over the next few years,” she said.
Opinions are divided as to whether the ban will have its intended effect of making housing more affordable for Canadians. Given the distinct realities of both the B.C. and Whistler housing markets, Whistler Real Estate Co. realtor Dave Brown believes it’s more smoke than fire.
“I don’t believe the ban is going to create more housing or anything like that; it’s more an optical move than an effective move,” he said.