The Adverse Impacts of the New Property Tax on Aspac Developments - a Recommendation Report

The Solutions for 

the Adverse Impacts of

the New Property Tax on Aspac Developments:

A Recommendation Report

Prepared for: Raymond Li, Executive Vice-President of Aspac Developments

CC: Marsha D’Angelo, CMNS 3000 Instructor,

   Kwantlen Polytechnic University

Prepared by: Jing Liang, Student, Kwantlen Polytechnic University

November 28, 2016

[pic 1]

Kwantlen Polytechnic University

12666 72 Avenue

Surrey, B.C. V3W 2M8

Cover Memo

“The Solutions for 

the Adverse Impacts of

the New Property Tax on Aspac Developments:

A Recommendation Report”

Prepared by:         Jing Liang, Student, Kwantlen Polytechnic University

Attached is the recommendation report for my research: “The Solutions for the Adverse Impacts of the New Property Tax on Aspac Developments: A Recommendation Report.” I completed all the tasks described in my progress report on November 28, 2016, and I gained a deep understanding of the current market trends as well as the details of the project that Aspac is currently working on. The recommendation report is the third step of a three-stage communication process required by an Advance Communication class at Kwantlen Polytechnic University. The purpose of it is to help the company to choose the best way to solve the issues caused by the enforcement of the additional property tax and mitigate all the adverse impacts on Aspac’s sales. In order to solve the problems that the company is encountering, I conducted multiple tasks to study the impacts and tried to find the best course of actions for the company. My research was approved by Raymond Li, the Executive Vice-President at Aspac Developments, on September 30, 2016.  

To gain both primary and secondary sources to support my suggestions, I conducted interviews with frontline staff and real estate agents and performed a plenty of online research. The main findings of the tasks are that instead of buying a house, people are now more interested in investing in an apartment and the real estate market in Vancouver is still in a panic.

In this report, I will provide three options as the course of actions to the company for dealing with the issues it is struggling with. One of the three course of actions that is highly recommended is expanding the market to the East Asian market and setting up an oversea office to attract more investors to enter the real estate market in Vancouver.

I appreciate the opportunity for performing research on this interesting topic. I also thank you for the trust you have shown in authorizing me to carry out tasks in this research. I look forward to working with you on any subsequent activities. If you have any question or concerns, please contact Jing Liang, at jing.liang4@email.kpu.ca or (604) 349-2560.

Table of Contents

Executive Summary        4

Background        5

Introduction of Background to Project        5

Problems Review        5

FIGURE 1: Average Traffic to Sales Center        6

Changes Proposed to Current Project Plan        6

TABLE 2: Comparison of the Different Course of Actions with the Original Plan        6

Conclusion        7

Housing Demand on Current Market Condition        7

The Moods among the House Buyers        7

The Real Estate Agents’ Knowledge of and Attitudes toward the Tax        7

Information about the Vacant Land that the Company Is Holding        8

Hopes on Future Immigration Policies        8

Oversea Market Expansion for the Company        8

Recommendation        8

Option 1: Expanding Oversea Market        8

Option 2: Delaying Future Project Plans        9

Option 3: Changing the Direction to Building Economically Affordable Housing        9

Works Cited        10

Executive Summary

Currently, Aspac Developments has not yet developed any solutions to respond to the enforcement of the new property transfer tax and is planning to adopt the original project plan. Such decision could be harmful to the company. To find the best way to mitigate the negative impacts of the tax that took effect in August this year, Mr. Raymond Li, Executive Vice-President of Aspac Developments, asked me to conduct a study to gain enough understanding about the current market condition.

To provide recommendations to Raymond Li, I completed all the tasks described in the progress report completed on November 11, 2016 and engaged in research and analysis. Research was performed on the current market trends; interviews with the local real estate agents and frontline staff of the company were conducted; policies were analyzed based on the information obtained through online research, and findings and recommendations were presented in this final report.

The main finding is that many buyers are now interested in buying apartment units than single houses. Because the price of single houses becomes unaffordable year after year, people seem to have changed their mind toward purchasing homes. Another finding is that property investors in Vancouver are in a panic due to the introduction of the additional property tax. Most of them are holding a wait-and-see attitude and are afraid of entering the market. Nobody wants to pay an extra tax to the government so that many foreigners who are interested in investing in Vancouver are scared away by the additional tax. Furthermore, it is found that the population of Canada will increase as the Canadian government plans to accept more immigrants from other countries. Once the population goes up, the housing demand will relatively hike.