THE IMPACT OF SPECULATION AND VACANCY TAX ON THE HOUSING PRICES IN VANCOUVER

This paper studies the effect of British Columbia’s Speculation and Vacancy Tax (SVT) on Vancouver housing prices. We also reexamine other economic factors referring to the existing literature, such as the GDP of the real estate sector growth, the 10-year government of bond yield, the local unemployment rate and the local population growth. We use difference-in-differences (DID) model to measure the effect of SVT policy. In the overall market of Vancouver, we cannot detect significant effect of the tax on housing prices. However, we detect an impact for the market segment we expect to be most affected by the tax— condos in Vancouver West. We find that British Columbia’s Speculation and Vacancy Tax has significantly negative influence on the prices of condos in Vancouver West in comparison with Toronto Central, where no similar tax is implemented.