"It’s mainly anecdotal,” Jim Flaherty told members of the Globe and Mail’s editorial board last weekend, “so I don’t have a statistical grasp of it.”
That may be of little comfort to those on either side of a debate growing around the role Chinese investors have played in driving up home prices to historic levels.
Earlier this month, economists and columnists suggested a ban on property buying by those foreign nationals may be needed to arrest escalating price growth.
The Financial Post’s is the latest to float the idea of dramatically clawing back the buying privileges of foreign nationals, whether they reside in Canada temporarily or seek to plant their investment flag in a country they’ve never called home.
Right-leaning Toronto columnist Diane Francis is asking any temporary resident — a person with a work permit — be restricted to one owner-occupied residence, which must be sold when he or she leaves the country. They would also be banned from buying any investment property for the purpose of leasing it.
The ban is all but complete for non-resident foreigners wanting homes or investment properties.
“The only exception is if a foreign entity doing business … wants to buy housing for its Australian staff,” she writes, referencing Australian law introduced in 2010 and advocating it as a model for Canada.
The suggestion echoes some Canadian property investors concerned that they are being shut out of the Vancouver and GTA markets as deep-pocketed Asian buyers ratchet up buying prices.
As an example, they point to a Toronto house sold in March for $400,000 above its $759,000 asking price. The new owners are Chinese nationals, buying the property as a college residence for their child.
Still, in this country, foreign investors can’t be blamed for the spike in condo construction in either Toronto or Vancouver, blaming instead the surge on Canadians’ collective buying spree and a low-interest rate climate.
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