This was published by The Globe & Mail today. It will be interesting to see if it has any impact, or if it eventually materializes. Likely a move to avoid (delay?) a crash before the elections.
Good source of revenue for the province and maybe they will share with the city so that the toll idea is gone.
Foreign buyers and real estate agents just drive the prices up so that homes that are worth far less than the million and a half "average" prices become unaffordable for working families.
Foreign buyers are just looking for investments that are relatively safe in today's economic climate.
Unlike get rich schemes such as ahem..."cannabis stocks" etc that will rise and crash, real estate always has some intrinisic value, usually driven by what the buying market will bear...
however the new real estate rules (20% down now) pushes affordabilty out of the reaches of most working Ontario "stiffs" paying taxe up the ying-yang, along with the high cost of food and shelter. Most first time buyers now can no longer scrape together $150k to 300k to put in that 20% down to get a 1.2 million dollar mortgage for 30 years.
Imagine the mortgage payments never mind the update property appraisal when the property is purchased..its downright crazy now!
Mortgage payment:
$5,400 Interest over fixed 2.42% on 5 year term"
$87,056
Total interest on life of mortgage (25years)
$419, 858
Even if the province goes ahead with an updated LTT (Land transfer tax) on realestate transactions done with foreign buyers...
say 5% on the final price..that's only $75,000 added to the cost will be recovered when the property gets flipped again 5 to 10 years down the road.
Now,at one time a family of wage earners assuming both working should spend no more than 30% on shelter of their gross salaries.
assume here both have $125K salaried positions that monthy total ($10K) minus at least 40% inciome taxes = leaves around $6000 of take home pay for both.
Add to the mortgage and taxes,
Car loans, credit cards, other living expenses and one can easily see that even $6000 of net income monthly for TWO wage earners will not suffice anymore.
If a marriage breakdown occurs,that's it!..nether spouse can afford the house on just $125 of salary.
The house is resold again and up go the prices!
Winners: Mortgage companies: (insane interest collected on these high ratio mortgages.
Real estate companies,
Ontario gov't land transfer tax
Muncipal taxes
Losers: the working stiffs that really need the house and can no longer afford it due to the high cost of living in the city.
The bubble WILL burst at some point.