"Everyone is sitting on the sidelines waiting to see what will happen."

Yes, to some degree, the same happened last September in the Lower Mainland, B.C. when the government's 15% tax on foreign buyers came into effect.  However, foreign purchases really spiked, and continued to be high for another 2 months.  Howcum?  Most were Chinese, who "knew" or "heard" that China was going to change regs with regard to expressly using Chinese funds to by foreign real estate.  China did--at least twice. THAT--not the tax-- knocked down "foreign buyers" rates early this year. 

Strange, though: 8.8% increase in housing prices in the same area since last year at this time (BEFORE the tax/China action.)  Howcum? All those other factors that haven't changed particularly: geography--water, mountains; big-back-yard syndrome, lack of housing supply, laggardly civic building regs and protocols, tens of thousands of (mostly Canadian) in in-migration each year. Things like that.