In April, I wrote a blog about the Foreign Buyers Tax our Provincial government announced as part of its Fair Housing Plan, with the intention of cooling the market and reducing home prices. In that blog, I mentioned that at Baker Real Estate Incorporated, we have tracked foreign buyer contact in all of our sites for several years, and it is consistently approximately 5 per cent – suggesting that the tax was not needed. This was in line with TREB’s fall 2016 survey of local realtors that showed 4.9 per cent of their transactions involved foreign buyers during the previous year.
Lo and behold, recently the Ontario government released the statistic that 4.7 per cent of properties that changed hands from April 24 to May 26, 2017 in the Golden Horseshoe area were bought by overseas buyers! Even if the percentage is slightly higher in Toronto and/or the GTA, we are still talking about an influence that is unworthy of the media hype it has received over the past few months. This is why we at Baker Real Estate have never panicked about foreign buyers. Many other factors are at work in determining both new and resale real estate prices.
BILD’s June 23rd news release on new home statistics for May 2017 indicates that the Fair Housing Plan is having little impact on the new homes market. Sales were strong, and prices increased. Although sales dropped during June, remember that is normal for this time of the year. Contrary to what you may have read, the market is still hot, especially for new construction condominiums. We are seeing brisk sales in locations outside of the downtown core, such as Yorkdale, North York and the 905 municipalities, where prices are more attainable for both investors and end-users. Overall, we have a more balanced market, which is beneficial to all involved.
I repeat that if the government really wants to bring down prices, it can increase the efficiency of approvals, speed up the process and flood the market with new homes and condos.