Economist weighs in on budget

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The Canadian government has promised to dedicate $500,000 for collecting data on foreign ownership, but one leading economist hopes that data won’t be used to discourage foreign buyers.

“One thing they said they would do is give money to statistics Canada to help CMHC get better data on foreign ownership. Having an evidence-based policy is a good thing,” Dr. Sherry Cooper, chief economist for Dominion Lending Centres, told “We’re all interested to know what the facts are. I’m hoping they don’t make measures to discourage foreign ownerships. That’s part of the underpinnings of the strength (of the housing markets) in Toronto and Vancouver.”

As part of the Liberal government’s first budget, Ottawa has promised to spend $500,000 to gather data on – and better understand – the influence foreign money has on the Canadian real estate market.

The government said reliable data does not yet exist for this segment of the housing market, which is thought to play a major role in driving up prices in Toronto and Vancouver – the country’s two hottest and, indeed, priciest markets.

“With respect to housing, Ottawa will support the collection of data regarding foreign purchases of Canadian residential real estate, providing additional funding to Stats Canada, working with CMHC and British Columbia. Evidence-based assessment of the situation is important,” Cooper said in a release.

The budget contained a number of other monetary promises and changes. However, it was two things Cooper didn’t see in the budget that may give brokers cause for optimism.

“I can tell you that I’m relieved that we didn’t see two things in the budget that were rumoured; we didn’t see a change in the tax treatment of capital gains and stock options,” Cooper told MBN. “Unlike the PC government or the actions taken in December to tighten credit availability.”
  • John Martin on 2016-03-23 10:27:09 AM

    What more evidence and data does one need. Just look who is buying these properties and where the HUGE amounts of questionable CASH is coming from. We all know. Same old, same old. Nothing will be done at the end of the day. Nothing!!

  • Rudy Risi on 2016-03-23 11:13:19 AM

    What amazes me is that the government is promising to spend $500M of our money on better understanding this. Isn't that CMHC's job? Don't they already post profits? Shouldn't this be their responsibility already????

  • Rom on 2016-03-23 11:29:45 AM

    I agree with John. We also need to control the situation of creating possible ghost town areas in Vancouver and Toronto. We have to make sure that foreign owned properties are tenanted or owner occupied.

  • Amy kinvig on 2016-03-23 11:36:28 AM

    I disagree with our DLC economist regarding the foreign buyers, yes are the pinnings but they have created a market that is unattainable for Canadians who live and work here, who contribute to our economy. The foreign buyers are all cash offers and do not live here, do not shop here or get mortgages here, they contribute in no way shape or form. Something needs to be done to curb this so people living here can buy homes again. For the first time in 15 years of being in this industry, I believe A bubble has been created in Vancouver due to Foreign buyers. I'm not saying go as extreme as Australia where they have banned them outright but, make it mandatory for them to live here 6 months of the year and confirm the cash funds so we aren't money laundering. And being part of illegal activity from foreign countries. Unfortunately our premier is in the business of flipping homes so, she won't want this to be curbed in anyway. hopefully something can be done quickly as I have so many families that can't get into or back into the market because they are competing with all cash offers from foreign buyers and not even inspections are being done on the homes.

  • The Wealthy Homeowner on 2016-03-23 4:56:34 PM

    Evidence based study explains how Economic theories like Trickle Down Home Prices are a Myth.
    Do your remember when smoking was safe, white bread was the base of Canada's food pyramid or better yet Trickle Down Economics would improve the less fortunate!!

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