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What happens if, in the wake of the government’s 15 per cent tax on foreign buyers, that real estate market cools off or, worse, collapses?

In a Friday afternoon seminar at the Hyatt Regency sponsored by the Urban Development Institute, a panel of economists, lawyers and developers tried to answer that and other questions. Would foreign buyers go elsewhere? Would prices fall dramatically if they did? And if prices plummet, would they rebound in the long-term?

Quick answer: Their guess would be as good as yours.

For the optimists, there was Helmut Pastrick, chief economist of Central Credit Union 1, who noted that the market had begun to weaken several months before the introduction of the 15 per cent tax — but in August, sales for detached homes in some neighbourhoods had plunged by $300,000-$400,000. (At which, some audience members gasped.)

However, Pastrick believed any downturn would take three to six months to play out. Then, if the economy remains sound — and here he made note of Metro Vancouver’s six-per-cent rise in employment — the usual market fundamentals would eventually come into play. Prices, he said, should begin to rise by next year. In two or three years, he said, he expects them to surpass present prices.

His advice to prospective sellers caught in the recent downturn: “Wait it out. If the economy doesn’t go bad, where’s the pressure to sell?”

That’s a big “if” given the space real estate takes up in the B.C. economy. Economist Tom Davidoff, associate professor with the University of B.C.’s Sauder School of Business, thought there was “a significant risk of a real correction.” How much? Thirty, 40 per cent, Davidoff guessed — but that, he said, was just that, a guess. Intangible factors that can’t be measured would be at play, he said — “a combination of uncertainty and pessimism.”

His colleague at the Sauder School, Tsur Somerville, agreed.

“I think there’s a real risk there if stuff turns south enough and it affects employment levels, then things could get real rough because real estate is such a large part of our economy now.”

After the seminar, what was it that Somerville called real estate tax revenue in B.C.? The government’s heroin?

pmcmartin@postmedia.com