Ontario reconsidering a foreign buyers’ tax to cool housing market - Page 3
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Thread: Ontario reconsidering a foreign buyers’ tax to cool housing market

  1. #21
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    Totally. What is a poor foreign student to do without a back-up $2M home?


  2. #22
    Senior Member kcowan's Avatar
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    The government is being played by foreign buyers and this has been going on for 30 years.

    $1m house with 2 Mercedes in the garage, just 2 students and grandma, my neighbours across the street on Cachet Parkway in the 80s. The government explained to them what help they could apply for. It was totally legal and never understood by our government employees.

    It has also been happening with Persian families in Vancouver for many years. Again they are our neighbours. Nice people. Love Canada. Cannot believe their good luck in finding such a stupid government.

  3. #23
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    This point is bang on. Also not everyone wants (or needs) to report that they were a foreign buyer. TREB is not doing any official statistics, just throwing out a best guess. Many foreigners believe Canada is a great place to live and have PR, landed, or student status. The true "foreign money" number is waaay higher than 5%.

    Go to open houses these days and see what kind of people are visiting. Most are Chinese with no shortage of money, few are the young couples barely trying to squeeze in to an entry level home with all of their savings, then there are the speculators/investors going for multiple homes.

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  5. #24
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    Dr. Josh Gordon wrote another report where he challenges the lack of supply theory in Toronto, and points to speculative demand instead. He also argues for a progressive property surtax, in addition to the foreign buyer tax.
    Report link (PDF)
    G&M article

    In the conclusion:

    As Mian and Sufi (2014; p. 9) put it: “Economic disasters are almost always preceded by a large increase in household debt. In fact, the correlation is so robust that it is as close to an empirical law as it gets in macroeconomics.”
    Last edited by rebel_ins; 2017-03-13 at 02:21 PM. Reason: Added quote

  6. #25
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    Quote Originally Posted by rebel_ins View Post
    Dr. Josh Gordon wrote another report where he challenges the lack of supply theory in Toronto, and points to speculative demand instead. He also argues for a progressive property surtax, in addition to the foreign buyer tax.
    Report link (PDF)
    G&M article

    In the conclusion:
    Good ol' debt... the toxic poison for the average household.

  7. #26
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    Where are foreign buyers in Montreal area? Please come.

  8. #27
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    I think the price increase should be allocated to two factors: The catalyst to drive prices higher, and the support.

    Everyone is pointing a finger at foreign buyers as the main culprit of housing price increase, I think they're partly correct and also partly wrong. Let's assume a very high rate of foreign buyer purchasing homes at 25% or 1 in 4 houses sold are to foreign buyers. But what about the other 3 houses? Well, they must be sold to non-foreign buyers right?

    So essentially, I think the foreign buyers are helping to drive the price increase, and the local buyers are somehow supporting it - they have to! This leads me to believe that the housing prices still have room to grow, it'll only slow down when the local money just simply do not have the funds to support the ever-increasing prices.

    Am I missing something here?

  9. #28
    Senior Member sags's Avatar
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    No shortage of illegal money in the world, and it is always looking for a legitimate home.

    You can only pile it up in a bedroom for so long.

    The same situation happened in Saskatchewan a few years ago. Chinese "farmers" were buying farm land through a Chinese realtor.

    The Chinese farmer never showed up. The land was leased to a farmer.

    The effect was that young Canadian farmers couldn't afford to buy land anymore.

    The government started talking about looking into it...........and it suddenly stopped.

    Now we have the same situation with housing.
    Last edited by sags; 2017-03-13 at 04:41 PM.
    Someone planted a tree a long time ago so I can sit in the shade.

  10. #29
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    Very common in my neighbourhood. We bought our house almost 3 years ago for $1.05M. My neighbour just sold his house for $1.925M, and his house is smaller than mine. The vast majority of prospective buyers are from mainland China. While there's been a problem in some areas with people just parking money and leaving the house to sit uninhabited, the homes in my neighbourhood are lived in. These people would not be considered "foreign buyers".

    That said, IMO the housing issue is a product of lack of supply and an influx of affluent immigrants. I think back to my parents' generation when they came to Canada in the late 60s. They had no money and were chasing a better life. They worked their tails off, rented housing, saved up, and then bought a house. Today, many - not all ofcouse - of the folks coming to the country are already well off. Hence, they can come here and overpay for a house and still put two Mercedes in their driveway without breaking a sweat.

    Quote Originally Posted by mordko View Post
    Well, I sold in the GTA. And the house closed within the last 3 months. And it was about =$2M. And bought by a student. A Chinese student, who is - of course - a resident. And all but 1 viewings out of 30 were by Chinese buyers.

    Worked out grrreat but something tells me there is a problem with this kind of market.

  11. #30
    Senior Member sags's Avatar
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    With interest rates of 2%, why would wealthy Chinese pay cash for a home ? No better place to employ a million dollars ?

    Most likely, they don't want to reveal their source of income.

    Someone planted a tree a long time ago so I can sit in the shade.

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