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Ban on foreigners would inflame affordability issue-analyst

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Ephraim Vecina | 06 Apr 2016, 08:15 AM Agree 0
An industry executive said that any benefits of blocking foreign investors from participating in Canada’s housing sector would get quickly overshadowed by the negatives
  • Lo | 06 Apr 2016, 11:02 AM Agree 0
    Don't ban foreign investors, tax them on there profits and if it is real estate and they are not living in themselves, actual owners who paid for property, not just a sibling, special assessment on the rent earned.
  • Dave | 06 Apr 2016, 11:06 AM Agree 0
    Lol ...ok Fortress. I think whats clear is how fast the bubble will pop and thats what Fortress is really worried about.
  • Menno van Driel | 06 Apr 2016, 11:06 AM Agree 0
    Those darn foreigners again. Cause of all evil. If they could just send their money and stay away themselves, perhaps that would satisfy us?
    • MFenn | 06 Apr 2016, 03:12 PM Agree 0
      Well, exactly. It is in the very nature of things for market economics to cause property around Vancouver and Toronto to be more sought after than other places. Trying to buck this market fact by getting people knotted up with people's national/racial/geographical origins is a rather ghastly and unCanadian way of proceeding.
  • | 06 Apr 2016, 11:43 AM Agree 0
    the dilemma is not about immigrants who purchase once they move to canada. the issue is parking off shore money to avoid counties and economies with unstable and crisis markets.

    the government has to look at investment rules and regs .... if someone is not living in a house and it being used as a tax haven then it should be taxed as such.... Housing should not serve as a loop hole for foreign investors to park money...

    i strongly suggest we do not confuse the issue
    • Gordon | 27 Jun 2016, 07:41 AM Agree 0
      Typical Canadian thinking. Foreigners are spending money here buying real estate; thus paying millions in land transfer tax and HST, creating employment and boosting our economy. So let's discourage them.

      How about making more serviced land available, build more houses and encourage them to buy more, so that we can grab more of their money?

      Real estate developers will tell you that the prices are shooting up because there is a supply shortage, especially in Vancouver and Toronto. The local government in these areas are slow in providing service land to satisfy demands created by local purchasers, immigrants and foreign buyers which incidentically constitutes only a low single digit percentage.

      Please don't discourage people from stuffing money in our pockets!!!!!!
  • Hans | 06 Apr 2016, 12:47 PM Agree 0
    If you or I wanted to buy a nice house in a popular area to go to whenever it suited us, and the property happened to be in a highly sought after area, should you or I be taxed differently than my neighbour who uses his house 365days of the year? Who is it really that insists that my house should be occupied by me more than once a year , or dictates where And how to invest my money for my pleasure? It seems to me that a few envious people are upset that Some rich people are investing in their area and giving them some competition but they are not doing anything illegal so they make up stories to try to get rid of their competition .
    • MFenn | 06 Apr 2016, 03:25 PM Agree 0
      Take the situation of many current and former Torontonians. Many of them have cottages as well as a principal dwelling in the GTA, and many of them spent months in the US also. But if suddenly whether they spent 4 or 5 or 6 months in the US, or whether they sell their Toronto home and live between the US and the cottage becomes an issue of what their geographical location is, then some absurd considerations will arise. All because some irresponsible politicians choose to whip up resentment about people because of their geographical origins; this is profoundly unCanadian. (So some of these politicians will reply: "Oh, it ought not to apply to Canadians, just to foreigners." But many investors are often in the process of acquiring Canadian citizenship anyway, so it would be a weasel argument to have to monitor whether an investor is a year or a month short of the end of his or her citizenship process. When it comes to property investment, It makes sense neither to measure people's geographical location for 6 months, nor to the person's national/racial origins. For politicians to manipulate people's feelings around this is irresponsible.)
  • Ross | 06 Apr 2016, 01:17 PM Agree 0
    Same sentiment on the report
    I only want to ask those who oppose foreign investment, ask a friends or neighbors who owns the property what prices they want for their property? And if they will sell it at discount to local buyer? I am sure he/she will not be a friend anymore.

    If you look at outflow of capital by immigrants those already here sending money to home country, you will never oppose this inflow of capital as this funds are generating economy
    Also ask those who sold their home, where they spending their windfall
    • MFenn | 11 Apr 2016, 08:12 PM Agree 0
      We need to be clear that measures to dissuade "foreign bogeypeople"'s investor money simply do not make economic sense. Such measures are redolent of the hapless Walter Gordon in the '60s. Michael Bliss writes that Gordon, a nice man and truly disastrous at the financial helm, "bypassed his senior officials to bring in outside consultants (most notably a thirty per cent takeover tax on sales of Canadian companies to outsiders), disregarded clear warnings that his schemes were unworkable, learned from an enraged business community that there really were unworkable, and then bungled their withdrawal. In a few days this deeply foolish finance minister destroyed his own reputation and crippled the government's. .. Pearson's real mistake was in not having accepted Gordon's resignation. Gordon's further mistake was in not having insisted on resigning." Michael Bliss, 'Right Honourable Men', Toronto, ON: HarperCollins, 2004, p. p. 225-226.
      Some would still have us believe that investment money from outside Canadian territory or by people with varying connections outside Canada somehow lacks some ill-defined, touchy-feely "national" spirituality: this is a highly discredited notion that belongs to Walter Gordon-style fantasies, and have no part in brutally prosaic investment analysis of the real estate markets. As Ross correctly says, why would my neighbour sell me a house for less than it is worth simply because I am supposedly more "authentically" Canadian than other bidders? This simply not how money and property markets work.
  • Scott | 06 Apr 2016, 01:46 PM Agree 0
    @ Hans - the only people with rules about residing in your home are home insurance companies.
  • MFenn | 06 Apr 2016, 03:06 PM Agree 0
    It seems that in some Canadian circles the old Walter Gordon-style nostalgia for racially-"pure"-by-another-euphemism yardstick for investment is still lingering. "Go away investors" and maybe people will feel better.

    Walter Gordon and the Foreign Investment Review process manifestly did not work. In the end the Federal Government had to admit that investment was welcome to the economy rather than supposedly damaging at a psychologically level.
  • Samir | 06 Apr 2016, 04:35 PM Agree 0
    Here we go again regarding foreign investors into real estate.
    Why we just keep it simple and clear for all including those real estate agents who are cashing on foreign investors buying in Canada and the government who are missing the point.
    Here we are talking strictly about Residential real Estate only
    Foreign investors know two things;
    1. The low Canadian dollar, which makes Canada as an attractive and discount real estate heaven.
    2. Canada is a safe and secure Place to invest in.
    So investors know the upside to invest here. They know the value will go up because of the immigration, people are flocking to come here. That will put more demand on housing.
    In return, those foreign investors as business people they know the benefits and there is a cost for this privilege.
    I. They should and must pay Levy (tax) I recommend 5% on the purchase price
    2. Pay Tax income tax on net rental.
    These Levies and taxes should be put in separate account to help the Canadian first home buyers, by giving them credit for Land transfer Tax and perhaps Development Leys.

    This will not reflect negatively on Canada or discourage foreign investment. They can invest in commercial real estate, no problem.
    Levies and Taxes on Residential Real Estate is implemented and practiced in Australia and new Zealand and some other countries.

    My concern is the Young Canadians coming out of College, carrying a large student mortgage. put his life on hold, to get married and have children. and can not afford a sheller.
    WE HAVE A SOCIAL RESPONSIBILITY to Canadians and we can not afford to widen the gap between classes of people. Some of these Canadians will become a burden on the government for assistance and in turn we all have to pay more in taxes to support them.
    I rather the foreign investor put the bill not the hard working Middle Class Canadians.

    Just a final note I am a small real Estate Investor and not greedy to have prices go through the roof to no end.

  • Shelley Saldat | 06 Apr 2016, 06:20 PM Agree 0
    I am disappointed at such a misguided analysis of what is driving up home prices in Western Canada.
    Vancouver statistics are in for 2015 real estate sales and a full third of purchases were made by Chinese residents. It has created a false real estate economy which has driven home prices up to such a ridiculous level that most residents, including semi-professionals can no longer afford to live near the downtown centre.
    As a real estate agent in Victoria for the past 17 years, I have never seen the crazy activity that we are experiencing in real estate until this year and it started in January! I did notice last Spring that many more buyers from Vancouver were coming through open houses compared to previous years. I asked many mainland buyers looking to buy in Victoria what their reasoning was. The majority said they are either fed up with the sky high list prices of homes in Vancouver or are dismayed by such a dramatic change in their neighbourhoods due to vacant homes of foreign buyers. They now want to get out of Vancouver. They basically say that Vancouver has hit the "Tipping point" in real estate and lack of appeal.
    The result this year is that in Victoria we are seeing a frenzy of real estate sales activity fuelled by Lower Mainland residents wanting to buy here and the recent effect of Chinese residents buying here. Homes typically are receiving offers that are unconditional and far over asking. The local families can not compete with the deep pockets of the new buyers arriving.
    My disappointment in the local real estate market is that the local population of residents are basically out bid almost every time.
    The Chinese buyers buy with cash and the portion of Canadian residents from the lower mainland that have been pushed out by the inflamed prices there (due to Chinese investment) are also offering over asking.
    I feel that we have a false economy happening here. I do not see any screening to see if the purchasers have resident status in Canada and what the source of their funds may be.
    I think our Federal Government needs to stop foreigners from purchasing in Canada without resident status and that the source of their funds should be researched.
    I am not the only one thinking this way. If nothing is done most of the population of Vancouver will end up being renters to support the work force and both Vancouver and Victoria families will not be able to enter the single family market nor will their children be able to aspire to the same hopes.
    Shelley Saldat
    Victoria, B.C.
  • MFenn | 07 Apr 2016, 01:21 AM Agree 0
    Respectfully, the "Go away foreign investors" and "insulate Canadians with less money to invest" was tried 30 to 50 years ago by Lester Pearson's patron Walter Gordon and his admirers and it resoundingly failed. I live in the GTA and it is in the very nature of things for property to be more in demand in cities such as Toronto and Vancouver (and to a lesser extent, Calgary); investors know the long term trends and act accordingly; this is the brutal reality, and insulating potential investors from it is unrealistic. It's also a fundamental maxim of aerotropolis that growth in cities with big international airports is likely to come by welcoming people with investments to make, rather than trying to cause their ethnicity to become an issue.
  • D416 | 07 Apr 2016, 08:19 AM Agree 0
    Residential Real Estate should be primarily for Residents. It should not be a haven for money laundering or tax sheltering or a method for getting immigration. This upsets the balance in the economic market and must be rebalanced through taxation or regulation. The fact that supply and demand are so mismatched means the balance has been broken, that is the problem that must be addressed. A country cannot be up for sale to foreign nationals. Investment should be welcome if it benefits the citizens and promotes the long term health of the country. That is the question we must ask ourselves. Does it?
  • MFenn | 07 Apr 2016, 12:07 PM Agree 0
    But throwing the label 'money launderers' at people as a consequence of being 'foreign' is unhealthy and in so many cases inaccurate. And what about the many seniors who might well spend 6 months or so of the year in a more propitious climate to the South after injecting a lifetime of effort and taxes into Canada but who suddenly might find themselves having to justify to politicians, banks and realtors their every movement because they have supposedly become unCanadian?
    Frankly, it's all very well to expect the Federal Government in Ottawa to counter Quebec separatists' attempts to exclude people they deem ethnolinguistically incorrect from the northern part of the National Capital Region. But then in BC to expect the Federal Government to help fear mongering nativists to drive away investors using almost the exact arguments that some Quebec separatists use.
  • D416 | 08 Apr 2016, 08:47 AM Agree 0
    This Discussion presupposes a hatred towards a ethnic group, which is highly inaccurate. Let's call this group 'the Vikings' and all of the objections against unfettered foreign investment would still hold. BTW have a look at US taxation of foreign owners, plus they get absolutely no social benefits. Also, look at Australia. Then look at what has happened to London U.K. It is naive to believe that foreign investment in Canada is benign. The nature of investment is that a profit or gain being had. Only the balance of give and should be maintained, measured and known. Not collecting stats and regulating consumption by taking stabs in the dark is just stupid.
  • MFenn | 08 Apr 2016, 03:21 PM Agree 0
    Okay, so 'stupid'?
    In the Vancouver area, West Vancouver is probably the most expensive area for housing. In the Toronto area, Forest Hill is probably the most expensive. In the Vancouver area, some people might say they like the idea of monitoring the Chinese, with a view to preferring other Canadians and new Canadians instead, and gearing property laws accordingly. In Forest Hill, Toronto, and various neighbouring areas also, a significant proportion of the property owners is Jewish. Can you imagine the outrage - and rightfully so - if it were mooted that property laws should be geared to preferring other Canadians and new Canadians instead, with a view to monitoring and redressing a perceived imbalance among property owners?
    I will happily remain 'stupid' in the eyes of the previous poster, but using the laws to manipulate ethnic groups is profoundly unsound.
    A situation also where those retirees, who have put a lifetime of effort and taxes into Canada but who might spend 5 or 6 months of the year in the South, are suddenly penalized by 'national residence' criteria, would be profoundly unsound also.
    It is the task of CSIS and the RMCP to figure possible sinister activity among those who come to our shores. It is not the task of realtors and investment analysts to use discourse that manipulates hostility to people from overseas, whether resident or not.
    • GTA CJ | 17 May 2016, 10:14 AM Agree 0
      So what if oversea investors like to invest in GTA and Vancouver and drive up our property price?! Why is it a bad thing? I live in GTA and profited greatly to the tune of $1M in profit per year over the past three years by flipping properties and sell to oversea Chinese rich buyers. We have to look at the opportunities at hand an profit from it. If the locals can't afford to live in these two markets, they need to be more creative in obtaining home ownership, ie.: basement rental, VTB, partnership, rent to own, etc... and stop bitching to the government and hope that they will take care of you. The rich will always have advantages over the middle/lower class. Learn to be rich and stop complaining.
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