CMHC: Foreign buyers are not the problem

CMHC: Foreign buyers are not the problem

CMHC: Foreign buyers are not the problem Citing recently collected data, the Canada Mortgage and Housing Corporation announced on Wednesday (November 30) that foreigners represented only a miniscule segment of home owners in the country’s most active markets, and thus could not be considered as the main driver of the outsized price growth in the Canadian real estate sector.
 
The latest CMHC report noted that foreign nationals possess a mere 2.2 per cent of condo units in Vancouver and 2.3 per cent in Toronto.
 
“The evidence tells us that the origin of investor activity in Canadian real estate is primarily domestic,” CMHC president and CEO Evan Siddall said in a speech, as quoted by Metro Vancouver.
 
“When a white person buys a house, we don’t know. When a person of a different colour does, we do, and that’s not good economics.”
 
The numbers and comments backed up similar observations made by the B.C. government, which found that foreign money accounted for only 3.6 per cent and then 1.7 per cent of all sales in the province in September and October, respectively.
 
Despite speculations that the 15 per cent property transfer tax on foreign buyers caused the decline, however, Siddall emphasized that the market already demonstrated signs of slowdown prior to the implementation of the levy.
 
The CMHC head added that it was a potent blend of record-low interest rates, the rise of the investment housing trend, a growing population, and a healthier economy that is the ultimate driving factor in the price increases, and that the only reliable way to address the affordability issue is to improve supply via the removal of red tape to improve construction speed.


Related stories:
CMHC: Canadian home buyers can still manage debt effectively
Further market restrictions will not cool down prices - executive
 
11 Comments
  • KJL 2016-12-02 9:07:01 AM
    So why all the changes from these bo hunks in Ottawa. Silly fools. Jeopardizing the life of young Canadians ...
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  • Omer Quenneville 2016-12-02 9:55:12 AM
    The problem with the market in Toronto has little to do with foreign buyers however, they shouldn't get a free pass. I do believe a tax is in order. Why should someone else be able to walk in and take advantage of our market that has not contributed in any way to our system. That being said the real problem is the double whammy of the land transfer tax. This is what is causing the reduced inventory needed to keep the market in check. The cost for a first time buyer to trade up to their second home is way to high. For a homebuyer to trade up from a $350,000 condo to a $700,000 house is not less then $60,000.00 in costs/expenses and that assuming they haven't got themselves roped into a fixed mortgage with a huge discharge penalty. Most homeowners can not afford to give up $60,000.00 on a trade up. Housing is supposing to be tax free for your principle residence as it is paid for with after tax dollars with no tax breaks on your mortgage interest unlike in the united states where you can claim your interest. The double land transfer tax should be eliminated on personal residence. If I remember correctly it was brought in by the out going mayor at the time Miller to help pay for transit and infrastructure. If this is the case, then what happened to that money and why do we now need road tolls? Feel free folks to wake up at any time or bend over the choice is yours.
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  • James Shinners 2016-12-02 10:21:28 AM
    IMHO this is pure BS. If CMHC's statements were true, then every major city in Canada should be seeing the same appreciation as Toronto & Vancouver. Perhaps it is the definition of Foreign Buyers that needs to be more clearly explained. How many new immigrants are granted Canadian citizenship purely based on their wealth, purchase property(s), and then return to their country of origin to continue working or operating a business there? I would include those people in the "foreign buyer" category. Including those people, I suspect "foreign buyers" are closer to 25% to 30%. I grew up in Vancouver and I saw how the provincial government sold Vancouver to foreign investors after Expo 86.
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