If you thought British Columbia had a lot of housing regulations, you are in for a shocker. Today we bring you a different type of blog post. When you learn what other places have for their regulations you will understand that BC regulations are not too extreme.
We went around the globe to see what kinds of limits have legislators have placed on potential homebuyers and renters.
We found that China and India do not allow non-residents to purchase real estate. Now, China and India are the most populous countries in the world. Their regulations protect the residents. It also allows them a better chance of being able to afford a home whether they are renting or buying.
In Berlin, we see where they froze rental prices for a period of five years. This is a legislation that protects some 1.5 million tenants.
In the Netherlands, the law protects tenants from eviction by a renovation. This legislation requires a minimum of 70% of tenants to agree with a landlord’s improvement plans. “Reno-victions” are very popular in a number of countries. As a result, this practice often displaces tenants and disrupt their lives extremely.
British Columbia Housing Restrictions
The Most Rigorous Housing restrictions in Canada today can be found in British Columbia. You should be familiar with the speculation and vacancy tax as well as the 20% foreign buyers tax. Many people do not like these measures but when you take a look at other rules that have been mandated in other places to deflate housing bubbles you find that our rules are not that bad.
Asian countries are not giving foreign nationals the ability to invest in their land. This gives them control over their property values, preventing them from going up. This is not the case in the western world. Instead, we allow foreign nationals to purchase real estate. This, in turn, has a very big impact on the value of our property.
European countries have a number of hard caps on rent. They also have direct financial top-ups that are offered to tenants who have to pay more than 30% of their income towards housing costs.
Canadian Housing Pressures
We see where a lot of the most desirable cities in the world are facing a lot of housing pressures similar to the ones being seen in Toronto, Victoria, and Vancouver. These places are seeing skyrocketing prices in homeownership and in rent. While these prices are increasing, wages are staying the same. The government must now implement policies that will provide protection to vulnerable tenants.
The regulations and taxes that are put into place are supposed to help to ensure that housing prices don’t continue to drive up. With a sharp rise in the number of global millionaires and an increase in flights from Asian countries into Western countries, coupled with a record low on interest rates for megaprojects, we see some amount of negative effects.
Population growth is a benefit to developers. They respond to this growth by building housings to increase density. But is this the true solution? If there is a continuous flow of cash into the markets house prices won’t fall. And that is why going through the tax system is the choice of most governments. When there is no money to be funneled into expensive areas, the market will be forced to keep prices from rising.