“If Mr. Flaherty wanted to help Toronto’s condo market, he should have introduced policies that curb speculation, not home ownership,” writes John Pasali, broker-owner of Realosophy Realty. “Possibilities include taxing condo assignments or introducing a capital gains or sales tax on units flipped immediately upon completion, both of which target the behaviours of speculators not end users.”
The comments come out of a review of the latest round of mortgage rules changes, the centrepiece being a drop in the maximum amortization to 25 years for insured mortgages written after early July.
Pasali argues home sales number for condos, in particular, suggest that first-time buyers are borne the brunt of the effects, as they find themselves shut out of high-priced condos that were once within their reach with longer amortization at their disposal.
The removal of that tool has left many of the would-be homeowners stuck renting units they would have been able to buy less than a year ago. The net gain has gone to investors, who dominate that market and command what are higher monthly rents than mortgage payments in some cases.
Still, Pasali’s proposed remedy wouldn’t necessarily reduce the number of condo landlords, says some critic, but instead grow them as they buy-and-hold rather than flip their properties.
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