Real Estate Slowdown Endangering NDP Budget

[misher]

https://www.straight.com/news/111568...incial-coffers

http://bcbudget.gov.bc.ca/2018/estim..._Estimates.pdf

Parts of this are estimates and speculation so please don't take my word for it. The NDP called for increasing real estate tax revenues despite instituting a slew of taxes/policies to decrease real estate sales. Unless something changes there budget is screwed and likely a good chunk of our economy. So far it looks like they will fall a billion short this year but I can see this increasing to 3 billion as slow real estate sales will affect more than just transfer taxes and foreign buyers taxes. In total the budget is around $54 billion with $4.85 billion from property and transfer taxes so this will mean around a 5% deficit from the real estate slump alone. I think everyone could have predicted that raising taxes would slow sales so I'm not sure if the NDP was thinking when it made up this budget or if they have a backup plan.

Think the NDP will reverse its housing policies? Raise taxes somewhere else to make up for the deficit? Cut its social programs? Or run a deficit?

[240glt]

Run a deficit, of course

It won't be a 5% deficit, People aren't going to suddenly stop buying property, so there will still be people paying property and title transfer taxes. I think this article is a little alarmist

[Jalapeño Chips]

Yes, I agree. Run a deficit, diversify the economy (LNG is coming big time), strengthen and invest in our resources. Housing restrictions and policies should remain and increased over time.

[svlt]

This party hopefully understands they can't have their cake and eat it too. Turning their noses up at resource development, discouraging property transactions and enforcing unionized wages can't all come for free.

[Jalapeño Chips]

Originally Posted by svlt

This party hopefully understands they can't have their cake and eat it too. Turning their noses up at resource development, discouraging property transactions and enforcing unionized wages can't all come for free.

Compared to the last party, this one will do a much better job.

[misher]

Originally Posted by 240glt

Run a deficit, of course

It won't be a 5% deficit, People aren't going to suddenly stop buying property, so there will still be people paying property and title transfer taxes. I think this article is a little alarmist

Well it may not be this year as many have deposits on projects so they will have to purchase them but their budget calls for increasing transactions next year and the year thereafter.

On the other hand our market has slowed down what it was 18 years ago so perhaps it will be 5% or more.

[whatnext]

Or not:

NDP government hits surplus despite wildfires, ICBC losses

[misher]

Originally Posted by whatnext

Or not:

NDP government hits surplus despite wildfires, ICBC losses

Yeah I must say I'm impressed
Lets see what happens long-term!

[whatnext]

Looks like misher's premise has been proven even less true:

The B.C. government is on track to net an additional $450 million in surplus for 2018-2019, despite falling property transfer tax revenue from a slightly moderating housing market.

In the government’s first quarterly report for the 2018-2019 budget, Finance Minister Carole James said economic indicators for B.C. are positive and that measures like a real estate speculation tax are beginning to slightly moderate Vancouver’s over-heated housing market.

While spending was $1.2 billion higher than budgeted, revenue was also higher than expected, increasing $1.6 billion. About $1 billion of that increase is from income taxes...

https://biv.com/article/2018/09/bcs-...igher-expected

[misher]

Originally Posted by whatnext

Looks like misher's premise has been proven even less true:

The B.C. government is on track to net an additional $450 million in surplus for 2018-2019, despite falling property transfer tax revenue from a slightly moderating housing market.

In the government’s first quarterly report for the 2018-2019 budget, Finance Minister Carole James said economic indicators for B.C. are positive and that measures like a real estate speculation tax are beginning to slightly moderate Vancouver’s over-heated housing market.

While spending was $1.2 billion higher than budgeted, revenue was also higher than expected, increasing $1.6 billion. About $1 billion of that increase is from income taxes...

https://biv.com/article/2018/09/bcs-...igher-expected

That article agreed with everything I speculated lol. The NDP’s budget called for rising real estate taxes and as they’ve said they are falling instead. They got lucky as something else did better than predicted and it’s balancing out the mistake. Full effects of the real estate slowdown are not yet realized and hopefully it won’t be that bad.

[rofina]

Originally Posted by Jalapeño Chips

Yes, I agree. Run a deficit, diversify the economy (LNG is coming big time), strengthen and invest in our resources. Housing restrictions and policies should remain and increased over time.

Agree.

This is a perfect time to diversify away from a RE based economy.

Besides - our RE market will remain strong long as we attract more talent here to our other burgeoning industries.

Tech, finance, mining, film, all these people need to live somewhere and housing needs to be built.

In fact, I think its not difficult to make an argument that decrase in property prices makes the region much more attractive for more people.

A good portion of my friends who left for Calgary or elsewhere would certainly entertain coming back to the Lower Mainland if affordability was a little better.