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Debate on banning foreign buyers resurfaces

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guest | 13 Apr 2012, 08:46 PM Agree 0

The Financial Post’s right-leaning columnist Diane Francis 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.
More specifically, 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. That temporary resident 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.
Francis points 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.
It’s a strategy more and more Canadian investors are adopting, although GTA selling prices have largely limited the viability of those plans. Americans, still grappling with tight credit and decimated home equities are also complaining about an influx of Canadian competitors now moving in to buy condos, townhouse and multi-family properties, often with cash in hand.
Still, in this country, foreign investors can’t be blamed for the spike in condo construction in either Toronto or Vancouver, counter critics of any Canadian move to follow several Asian and Western markets already restricting foreign ownership.
They blame the price surge in this country on a buying spree by Canadians, themselves, relying on low-interest rates and "liberal" default insurance guidelines.
  • Robert | 15 Apr 2012, 04:00 AM Agree 0
    Hello, I am Chinese male 27 years old and I have lived in Canada all my life. I don't find this "controversial" at all. There really is no benefit to Canadians. If you don't live in Canada and call this place home, you shouldn't be allowed to buy a home here. As Canadians, try walking into China to buy a home. Good luck, you can't! Even if you live in China, you are only allowed one property. The point is, foreigners are buying up our properties and driving prices up. Us as Canadians are buying overvalued properties from them or worst, paying rent to foreigners. That's like being a prisoner in your own home. Please protect our people!
  • Angela Wong-Liao | 17 Apr 2012, 07:10 PM Agree 0
    I am a long time Chinese Canadian who has lived in this country for almost 40 years. I find the recent upsurge of real estate prices in Canada, particularly in Toronto and Vancouver are completely out of control. All these foreign money, especially from China and Middle East can adversely affected our real estate market as the local Canadians would be difficult to buy a property. What happened to the next generation of Canadians?
    I fully agree that our government should set up tighter rules for foreign investments, especially non-resident investments.
    I am also concerned about the quality of mortgage portfolios from CMHC, their rules and regulations have been very liberal over the years. We do not want our national government agency ended in similar fate as Fanny May and Freddie Mac south of our border.
  • ROSARIO | 19 Apr 2012, 01:32 AM Agree 0
    Yes, please government do something about, our precious children who are born here, won' t have a chance to buy anything
    these outsiders are buying everything, is so frustating to buy at the present moment because for every property, these outsiders are paying autrageous prices, that only these rich investors can afford, and what about us, we canadians that are working here and paying taxes here, we are not GOING TO HAVE A PLACE TO CALL OUR HOME, CRAK DOWN ON THESE OUTSIDERS AS SOON IS POSSIBLE.
  • eaicsmith | 20 Apr 2012, 04:29 AM Agree 0
    Dear Readers

    It is interesting to read the attitude of people attempting to restrict foreign ownership on the basis this will preserve real estate for Canadians. As an economist who lived for many years all over Canada and worked for Manpower and Immigration services of the Canadian government , l can advise you that very strong research indicates you are wrong.

    By in large net inward flow of investment into a country like Canada has been a very positive benefit to Canada and historically the inward flow of money and people even if to buy second homes strengthens the Canadian economy, provides employment and stimulates new business. Canada as one of the largest geographic areas in the world, a very low population density, abundant assets and resources is well placed ( as it has been throughout its history ) to accept inward flows of people.

    Over population is not a Canadian problem but is for many countries you site as examples of a closing door policy. Please compare oranges to oranges.

    I would also remind you that there are many home grown Canadian speculators who compete for property and it is always the case that those with more resources outbid those with less resource be they Canadian or foreign. If supply is an issue then that is a government policy issue to be addressed or simply why not ask Canadian developers to build developments only for Canadian residents to buy. Highly unlikely as they will sell to whoever wants to buy their product at the highest price be they Canadian or not.

    Shall we also follow your closed door approach to buying property and apply it to Canadians ie buying in the USA or in Europe. Shall the UK shut out Canadians from its overstressed markets. Naturally reasonable rules and guidelines make sense for orderly economic markets to function but foreign buyers are not the real issue in Canada. It is key to grow your resource rich economy which takes investment and if foreigners choose Canada it is buy and large due to the value they place on Canada as a location worthy of investment. This investment does tend to fall into the upper markets which is not the preserve of the majority of buyers.

    The facts are foreign investment, investors , full or part time property owners, are very positive in supporting the overall wellfare of Canada and Canadians and add greatly to Canada's history of accepting people and blending them to make Canada what it is today.

    Become protectionist and face the music. Then lets chat again.

    EAIC Investment,Development Director
    London , United Kingdom
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