Why isn’t gov’t doing more to cool the real estate market? Expert says too much money to be made

VANCOUVER (NEWS 1130) – As Metro Vancouver real estate prices continue to skyrocket, many people are hoping the government will step in and help.

But a UBC professor says when you consider how much money government is pulling in, that isn’t likely to happen.

Tom Davidoff with the Sauder School of Business says our hot real estate may not be great for people trying to buy a place, renters, and companies trying to attract workers. But it is lucrative for governments at a time when the rest of the Canadian economy is struggling.

“It is great for home owners and it is great for the provincial coffers. I think doing nothing is probably more appealing than doing something that might risk all the prosperity. At the federal level, it is even more clear that you don’t want to pull the plug.”

Davidoff thinks governments are reluctant to do anything that could affect all the cash the industry is bringing in.

“You have got the whole rest of the nation’s economy not doing well at all. For example, the Bank of Canada just decided not to raise interest rates, which would cool down local housing markets but would weaken the rest of the economy.”

He adds if the government was really serious about improving the situation, it would end the tax giveaways to people who don’t live and work in the markets where they buy and adjust by-laws as an incentive to build more housing.