It just got even harder for foreign investors to buy up homes in Ontario
Though the average price of a home in the GTA fell slightly in March for the first time in many months, Ontario's housing market continues to be ridiculously hot, with ever-skyrocketing prices and dwindling supply despite a flurry of new construction.
While most people in the province are finding themselves hard-pressed to be able to afford a home here now (or ever), many are blaming overseas buyers at least partly for the current state of things — and various levels of government have come up with new ways to address the issue.
Investor-owned homes have reached record highs as of late, with people who already own multiple properties cited as being behind around 25 per cent of home purchases in Ontario during 2021, driving up prices to the current $1.3 million for the average home in the Toronto area.
Just got pitched "Laneway houses are the solution to the housing crisis!"— Stephanie. (@stephanie_hinds) April 7, 2022
Lower home prices
Dealing with foreign buyers (higher tax/ban)
Building more affordable homes
Affordable housing programs (rent to own)
Not the damn laneway house.
Though a non-resident speculation tax of 15 per cent across the province and a vacant home tax of one per cent in Toronto specifically were meant to curb how many of these investors are those who don't even live here, the trend still persists, with 7.7 per cent of new condos in Toronto now owned by non-residents, according to StatCan.
Foreign homeownership overall continues to rise across the province, reaching 3.4 per cent in 2020, and many are calling for more drastic moves from leaders as a result.
YES ban on Foreign #buyers - will nitpick more later but this is must (easy to reverse/adjust no excuses) - ban "For 2 Years" - a good move for a true economy. #realestate #cdnpoli #onpoli https://t.co/LaHh6R5EI1 https://t.co/pXA1wVtoad— Raquel Goncalo B.Arch. (@RaquelGonStudio) April 7, 2022
Last week, Premier Doug Ford upped the tax rate for foreign buyers to 20 per cent to tackle the housing problem, along with vowing to "enhance measures that will crack down on land speculation," and more.
And now, Prime Minister Justin Trudeau has moved ahead with his own plan to ban foreign homebuying in Canada completely for two years as prices nationwide have jumped a whopping 50 per cent in just as much time.
The federal budget being tabled on Thursday is expected to focus largely on the untenable cost of housing in the country, with experts telling CBC news today that "if there's one theme that they would like Canadians to take away from this budget, it's that the government is trying to help people on the housing question."
There is a confusion, or failure to distinguish between, foreign buyers + domestic investors. Gov'ts target foreign buyers, but domestic investors are given a free ride. Taxing revenue from housing investments as employment income would have an immediate cooling effect.— Jennifer Keesmaat (@jen_keesmaat) April 7, 2022
Though it's great to see the government doing at least something to combat housing prices that have soared exponentially higher than general inflation rates, many are pointing out that something also — perhaps more urgently — needs to be done for investors here at home who are hoarding much-needed supply to flip or use as income properties and causing prices to climb as a result.
With this in mind, some are calling the foreign buyer ban misguided and not at all a proper solution to the massive problem.
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