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Mortgage Broker News | 22 Sep 2016, 08:15 AM Agree 0
Even just a “perception” of the tax might lead to a market downturn, real estate lawyer warns
  • Kris Kooblall | 22 Sep 2016, 09:20 AM Agree 0
    This is a classic case and example of interest driven lobbying.

    This Toronto-based law practitioner Bob Aaron makes a case on pure emotive reasoning and one can understand why as there personal financial interests here at stake.

    /“It’s important to our economy to have foreigners investing here. If we cut off the supply it’s going to say Canada is no longer open for business, we’re closed for business, we don’t want your money; that’s going to reverberate throughout the economy,” he added.

    “The perception of the tax, rather than the tax itself caused a slump in the market and if we had a slump in the market the default rate in mortgages across the board would be horrible.”/

    This is not factual in any way. There is no corroborative evidence to support this speculation.

    Josh Gordon is assistant professor at the Simon Fraser University School of Public Policy says very clearly:

    "We want foreign “investment”: This isn’t productive “investment,” this is buying houses. There are no productivity gains from residential real estate spending – for all of its foreign “investment,” incomes in Vancouver remain among the lowest in urban Canada."

    Foreign investments in the purchase of residential real estate makes absolutely no sense as homes are not investment tools and the purchase by foreigners are used, in part, for flipping and often times are left vacant.

    This defeats the very purpose of Canadian families purchasing homes to live and work in proximity to their lives.

    What is the purpose of housing; to induce foreign investments?

    Foreign governments are protecting their prime residential real estate via legislation and their internal taxation system and we have ours up for sale to foreigners crowding out Canadian families in the process.

  • Ron Butler | 22 Sep 2016, 11:19 AM Agree 0
    I mainly agree with Kris and I will even propose that in some cases it is actually "trading" in houses. Trading in the same way you would trade stocks in an equity market, buying and selling houses as a momentum trade. I do not believe that particular type of trading adds no real value to our local economy. However those that move here and live here do in fact add to the local economy.

    At the end of the day it is difficult to tease out who belongs in one camp and who is in the other.
  • Tomas | 22 Sep 2016, 01:25 PM Agree 0
    Uh...Kris Kooblall, you know 99% of the readership of this site is mortgage brokers, right?

    Not the forum for pitching an academic tent.

  • Kris Kooblall | 22 Sep 2016, 02:07 PM Agree 0
    Thank you Ron.

    Tomas, mortgage brokers are extremely important and I recommend that mortgage brokers assists in the solution to our national housing crisis by helping the Government of Canada.

    We are all consumed in this crisis as housing is important to the current and future generations of Canadians.

    The Bank of Canada has estimated annual growth in the 1.5% levels and housing being a component of productive economic activity and the creation of real wealth, we can start to look beyond the 3% levels.

    We are not there yet and need to solve this housing crisis and everyone is needed esp. the brokers.

  • Ron Butler | 22 Sep 2016, 02:13 PM Agree 0
    I think many mortgage brokers are interested in an academic viewpoint, surely we are all not exclusively wedded to our own self interest? We should want to see all points of view.
  • Dave | 23 Sep 2016, 10:08 AM Agree 0
    Huge foreign buyer effect in BC , look at these numbers just released. I'll bet Toronto and GTA is not far behind from the stories ive heard from RE agents....

    http://www.richmond-news.com/news/foreigners-were-buying-one-in-four-richmond-homes-before-tax-1.2349606

    http://www.theglobeandmail.com/news/british-columbia/data-show-drop-in-bc-foreign-property-buyers-since-targeted-tax/article32000190/
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