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There has been much hand-wringing about the overheated housing markets in Vancouver and Toronto. Accelerating price gains in the past year are indicative of a buying frenzy, especially in Vancouver, which is clearly unsustainable. New listings are way down, new supply is constrained, and buyer euphoria seems to be suggestive of panic fear of missing out — all of which has made housing less affordable and far out of reach of most middle-class households.

Housing affordability is a hot-button political issue, so it is not surprising that the B.C. government, facing an election in less than a year, has felt compelled to do something to dampen the fervor. Time will tell how impactful the new tax will be, but one thing is certain: Housing in Metro Vancouver will remain unaffordable for most households.

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RBC estimates that owning a single-detached home in the Vancouver area would require 120 per cent of a typical household’s income. In other words, unless the buyers have access to a huge downpayment (thanks, let’s say, to Mom and Dad), it is out of reach. Even condos are too expensive for average earners in Vancouver.