BC’s action could be bad news for Toronto

While there is no consensus on whether the 15 per cent tax on foreign home purchases in Metro Vancouver will cool any of the heat in the market, there could be a consequence elsewhere.

Some analysts are suggesting that rather than pay the additional cost in BC, foreign investors may simply switch their cash to Toronto or other markets.

Toronto-Dominion Bank’s senior economist Michael Dolega said Tuesday: “Even prior to the new policy announcement, we believed that foreign investors had already begun to gravitate to the more affordable Toronto market. As such, prices in Toronto could see some significant upside pressure in the coming months as foreigners look to new markets.”

There is speculation that Ontario could also implement similar measures to their BC counterparts in order to stave off increased demand from foreign buyers.

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