With a new tax on foreign homebuyers in Vancouver expected to slow purchase activity, there is a greater risk the city's lofty real estate prices would be vulnerable to a potential jump in local unemployment, Fitch Ratings said on Monday. "We feel that foreign investors have been propping up real estate in Vancouver, creating more demand, which is raising prices," said Susan Hosterman, director of U.S. structured finance at Fitch Ratings. That means if real estate prices tank, it could take many jobs with it. For that reason, University of British Columbia professor Tsur Sommerville says if the region were to experience a sudden spike in unemployment, the most likely culprit would be the real estate sector. "It's not just that there's less buyers in the real estate market: you've got all these people whose jobs are dependent on the over-exaggerated real estate market.

Source: CBC News August 23, 2016 22:56 UTC