Tories look to borrow a page from Australian playbook

As voters get ready to head to the polls on Monday, investors are still being wooed by the incumbent Conservatives who are promising to consider a ban on foreign investors who buy existing residential housing in tight markets such as Toronto and Vancouver, an idea they’ve borrowed from their counterparts down under.

Prime Minister Stephen Harper floated the idea in his party’s full election platform, which was just released, that a re-elected Conservative government would consider an Australian-style solution to the issue.

“Given the importance of homeownership, our government wants to make sure it remains a dream within reach for the average Canadian family,” read the platform.

“Some reports have suggested that speculative foreign non-resident buyers are a significant factor in driving homes out of the price range of average families, especially in Vancouver and Toronto. If speculators are driving up the cost of housing to unaffordable levels, that’s something the government can and should address.

“Other countries, like Australia, have put in place regulations that limit the ability of foreign buyers to purchase existing houses for investment purposes.”

The Australian policy is supposed to prevent wealthy foreign buyers from driving the price of average homes beyond the reach of Australian families, while at the same time growing the country’s housing stock.

But not everyone agrees this policy works, pointing out that Sydney’s housing market is equally unaffordable as Vancouver’s.

“We’re not intending to zero in a punitive way on people who come here to invest,” B.C. Finance Minister Mike de Jong told The Vancouver Sun. “Our general approach in building the economy has been that foreign investment is good for B.C.”

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  • by Samir Sa'd 2015-10-16 9:41:56 PM

    I have wrote before here about the foreign investment in real estate impact on the housing market in particular for Vancouver and Toronto markets.
    Here again let me make clear the Australian approach it might not work well here in Canada. And what Mr. Harper and the Conservatives propose is not very ideal.
    I am a small real estate investor. I should be happy for the prices go up, but I am not like that. I am not greedy and money is not everything. I am concerned about affordability for those young Canadian families trying to get into the market and have a roof over their head. Those young Canadian families are working so hard, raising families. Those young families are the backbone and the future of this nation. The Government has an obligation to help provide affordable housing, otherwise they become a burden on the society.
    I do encourage foreign investment in this country if that investment generate a sustainable jobs. but for those who come and put their money in Canada because it is a safe heaven for their money, all they are doing is raising the house prices to unaffordable level.
    My proposal is to put a levy or tax of 5% on any foreign investor who purchase a residential property. This levy to be used only for infrastructure projects to create jobs and stimulate the economy and give first time home buyer a further land transfer tax break.

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