Photo: Phillip Grondin/Flickr
Calls in Seattle for a foreign-homebuyer tax will no doubt be familiar to residents of Toronto and Vancouver.
After all, within a one-year window, both Ontario and BC introduced foreign-homebuyer taxes of their own targeting those cities as well as the areas surrounding them.
But unlike Toronto and Vancouver, where annual home price gains peaked in the ballpark of 30 per cent before policymakers stepped in, the price performance that has Seattleites up in arms is decidedly more muted, a BMO chart shows.
In June, Seattle home prices were up 13.4 per cent from a year ago, according to the latest reading of the S&P/Case-Shiller index.
From a Canadian perspective, BMO Chief Economist Douglas Porter suggests one takeaway.
“If Seattle has a problem now, it makes prior conditions in the two Canadian cities look that much more out of control by comparison,” he writes in a research note out this morning.
Whether or not Canadian policymakers should have acted sooner is a point of debate, but regardless, Porter makes his stance on the effectiveness of BC and Ontario’s policy moves clear.
“One thing we know is that, despite much questioning beforehand, those measures worked,” he writes.
Greater Toronto Area home prices declined by 4.6 per cent in July compared to June, according to the Canadian Real Estate Association (CREA)’s Composite Home Price Index.
Over the same one-month period, Greater Vancouver prices increased 2 per cent, as per the CREA index, but sales activity remains off previous highs.
“This is a late bubble. Bereft of life, it rests in peace,” Porter wrote in another recent note about the Toronto market and the provincial measures introduced in April intended to cool it.