Toronto's soaring housing prices and Ontario budget - We need foreign buyer tax..

[CITIZEN_2015]

The Toronto Real Estate Board on Wednesday said prices climbed 33.2% across the GTA in March from a year earlier to an average of $916,567 and the city seems poised to climb past Vancouver as the most expensive housing market. The critical issue for policymakers, both federally and provincially, is how to cool the GTA and the surrounding GGH without damaging the more delicate parts of the country where housing markets are in recovery mode.

The solution to this crisis is NOT another round of Mortgage regulation as this affects the whole country and housing market is already slow in many parts of the country including Western Canada, Easter Ontario, Quebec and Maritime. In fact I think it was even a mistake the last time Federal finance minister imposed new mortgage regulations as it affected the whole country not just the heated markets in Toronto and Vancouver. So what is the best solution?

In my view the foreign buyer tax in Greater Vancouver has reduced the massive price gains and slowed sales there, We need a similar tax for GTA so that ONLY the heated area is affected and soaring housing market is best addressed rather than the whole country where twp-third of market exists and is cool already.

[Bonam]

1 hour ago, CITIZEN_2015 said:

In my view the foreign buyer tax in Greater Vancouver has reduced the massive price gains and slowed sales there, We need a similar tax for GTA so that ONLY the heated area is affected and soaring housing market is best addressed rather than the whole country where twp-third of market exists and is cool already.

First you have to endure a generation of absurd housing prices and wait for all the young people to leave the city, leaving it an empty husk. Then you can get the tax after that, like Vancouver did. 

[Boges]

I do think cracking down on people buying condos and houses for no other purpose than leaving it there empty needs to be dealt with.

But I've heard that the real problem is with supply. It's hard to believe that in downtown Toronto where Condos are being built everywhere. 

What is very hard to find is proper rental properties. Those just aren't being built anymore. If you want to rent, you'll either have to find a basement apartment or rent a condo (like I do). But if those people are using the condo as an investment property (and to pay down the mortgage), it could be even more expensive than buying. 

 

[dre]

I'm really worried to be honest. I have almost almost all my equity tied up in real-estate and I'm pretty sure there's going to be a big correction soon.

[Topaz]

Windsor Ont., is reporting that many new residence are from TO., selling for high prices and coming down to were the COLA isn't high as TO.

[SpankyMcFarland]

How big an effect do foreign buyers have in TO? It would be smaller than Vancouver? 

I thought the internet would reduce the attraction of large cities as work became less tied to particular locations; instead it has increased it. 

[SpankyMcFarland]

3 hours ago, Topaz said:

Windsor Ont., is reporting that many new residence are from TO., selling for high prices and coming down to were the COLA isn't high as TO.

Windsor entered my head the other day as a possible place to live, particularly as we are still buried in snow here in NL. I'm more familiar with Michigan than any other state so that would be a bonus but the online commentary about Windsor can be fairly negative. 

[H10]

No, I believe in the free market, I believe that I have the right to get the biggest amount of money from any buyer anywhere, not my problem if poor people cannot afford to live in the city, move out the city, rent, or go live in Scarborough.  People just want to l ive in the expensive downtown core and complain.

[CITIZEN_2015]

8 hours ago, hernanday said:

No, I believe in the free market, I believe that I have the right to get the biggest amount of money from any buyer anywhere, not my problem if poor people cannot afford to live in the city, move out the city, rent, or go live in Scarborough.  People just want to l ive in the expensive downtown core and complain.

Nobody opposes free market but if something is not done and soon then there will be a HUGE correction and then everybody loses including likely those have nothing to do with this like cities far away will be dragged down with Toronto already suffering from weak housing market.

[H10]

9 hours ago, CITIZEN_2015 said:

Nobody opposes free market but if something is not done and soon then there will be a HUGE correction and then everybody loses including likely those have nothing to do with this like cities far away will be dragged down with Toronto already suffering from weak housing market.

That is also part of the free market, the free market dictates those who save their money will be able to buy up houses during the crash and get rich, this is why there new millionaires in the 1930s during the great depression than at any other time in american history.  When you have a big crash, it allows the common man with savings to buy up big real estate.  Those people saving $350,000 to make a down payment in toronto, might be able to buy 5-6 houses or an entire condo when the market crashes.  Trump tower was bought up during a recession in prime manhattan real estate for just $1 million.  It is now worth over $100 million.

[Hal 9000]

The real estate market isn't going to crash in places like TO and Vancouver because it's foreign money buying the property.  And , as the Canadian dollar lowers, it'll only get better for them.  A foreign buyer tax will do nothing - either stop selling to outside interests or do what Vancouver people are doing - cashing out and leaving it for the Chinese.

[Charles Anthony]

Folks, 

Avoid posting personal attacks. 

[Topaz]

Yeah, well what happens to those people who are living in those expensive houses, living pay cheque to pay cheque and the mortgage rates suddenly soar?

[Boges]

On 8 April, 2017 at 7:16 PM, Hal 9000 said:

The real estate market isn't going to crash in places like TO and Vancouver because it's foreign money buying the property.  And , as the Canadian dollar lowers, it'll only get better for them.  A foreign buyer tax will do nothing - either stop selling to outside interests or do what Vancouver people are doing - cashing out and leaving it for the Chinese.

Hasn't the Vancouver tax actually been effective in lowering prices though? 

[CITIZEN_2015]

6 hours ago, Boges said:

Hasn't the Vancouver tax actually been effective in lowering prices though? 

Yes foreign buyer tax has been very effective in Vancouver. Proof is there. Not sure why people are ignoring facts and figures about Vancouver and why same logic cannot be applied to GTA!!

[Bonam]

1 hour ago, CITIZEN_2015 said:

Yes foreign buyer tax has been very effective in Vancouver. Proof is there. Not sure why people are ignoring facts and figures about Vancouver and why same logic cannot be applied to GTA!!

People don't care about facts, only ideology. 

[Hal 9000]

The lowering of prices began before the tax was introduced.  I suppose the tax had "somewhat" of an impact, but the bigger reason is that high end properties have dried up somewhat and also Vancouver people who wanted lottery type prices for their homes came back to reality a little.  The Chinese currency laws are having somewhat of an effect and there can only be so many Chinese who are buying.  Those Chinese though, who are paying a million dollars cash, aren't as dissuaded by the tax so much as the desirable properties are becoming fewer.

IOW, it's just a natural course correction. 

[ZenOps]

You *could* blame foreigners.  But I'll blame money printing in the US.

I mean Kanye is $53 US million in debt, and yet still wants to borrow $1 Billion more.  And the banks might just print up more money to let him have it.

Out of all countries in the world only Germany seems to have some fiscal restraint when it comes to raw money printing.

[blackbird]

On 2017-04-07 at 10:39 AM, Bonam said:

First you have to endure a generation of absurd housing prices and wait for all the young people to leave the city, leaving it an empty husk. Then you can get the tax after that, like Vancouver did. 

The Vancouver real estate tax is too little too late.  The house prices are up around a million dollars for the cheapest house.  It should have been dealt with 40 years ago.

[bush_cheney2004]

2 hours ago, ZenOps said:

You *could* blame foreigners.  But I'll blame money printing in the US.

 

I would expect nothing less....but the U.S. is also foreign.

[ZenOps]

Darn foreigners.

But to put it in perspective, California metro is going to pretty much be averaging $5,000 per month as pure rent (not even talking payments on ownership)

 

[herples]

A tax on foreign ownership means less houses will be constructed since companies are not going to build houses if no one is going to buy them in the end. The focus on foreigners is ignoring the fact that in both Vancouver and Toronto there is a resistance to building apartments buildings and condos by the general population. 

Edited April 14, 2017 by herples

[xpers3312]

On ‎4‎/‎7‎/‎2017 at 0:31 PM, CITIZEN_2015 said:

The Toronto Real Estate Board on Wednesday said prices climbed 33.2% across the GTA in March from a year earlier to an average of $916,567 and the city seems poised to climb past Vancouver as the most expensive housing market. The critical issue for policymakers, both federally and provincially, is how to cool the GTA and the surrounding GGH without damaging the more delicate parts of the country where housing markets are in recovery mode.

The solution to this crisis is NOT another round of Mortgage regulation as this affects the whole country and housing market is already slow in many parts of the country including Western Canada, Easter Ontario, Quebec and Maritime. In fact I think it was even a mistake the last time Federal finance minister imposed new mortgage regulations as it affected the whole country not just the heated markets in Toronto and Vancouver. So what is the best solution?

In my view the foreign buyer tax in Greater Vancouver has reduced the massive price gains and slowed sales there, We need a similar tax for GTA so that ONLY the heated area is affected and soaring housing market is best addressed rather than the whole country where twp-third of market exists and is cool already.

 

The Provincial Government has been on a campaign to stop development outside of the GTA by constraining and delaying applications.

As a result people are being forced into the GTA because no capacity for living and amenities are available outside the horseshoe.

This what is happening, has nothing to do with Foreign buyers, because the international community has always been investing in Canada. Probably less Foreign purchases in Toronto than Vancouver, from what I hear, that may not be true.

Rate of immigration changes nothing, because we have always taken in the same amount of immigrants per year.

And has nothing to do with speculation, because if the market has a demand which greatly surpasses the supply then prices naturally go up.

Don't forget, our dollar has devalued by 30% over the past 5 years.

 

There are some possible solutions, but not limited to:

1. Reduce the amount of immigrants granted landed status. There are moral consequences to this.

2. Plan and allow centralized communities to be developed outside of the GTA

3. An Empty Home Tax

 

This is the classic Wynne knee jerk and is tampering with the housing market without examining data, facts and economic outcomes.

As great as the Federal Liberal Government has been to date at being calculative and careful, I think the K.Wynne has just single handedly sealed the Libs political tomb.

Get comfortable with unemployment everybody.

Edited April 20, 2017 by xpers3312

[Boges]

Isn't this Foreign Buyer Tax an attempt to keep people from buying units just to keep them empty. 

This seems like a damned if you do, damned if you don't scenario. 

 

[CITIZEN_2015]

Using the simple supply and demand principal it makes every sense for the logical minds to promote the foreign buyer tax in GTA. It will adversely affect the demand side at the very least and hence prices as well. It may not be enough by itself alone to cool down the housing market in very hot GTA area at least not enough so the something needs to be done to supply side too. Likely all some or all restrictions on new construction removed and incentives to build new homes and condos.