A foreign buyers’ tax similar to that implemented by the British Columbia government would prove fatal to the Toronto housing market, a renowned real estate lawyer cautioned.
“So much of [Toronto's real estate] is owned by foreign owners, and we welcome their investments,” Toronto-based law practitioner Bob Aaron told CBC News
“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.”
Various market analysts have previously sounded the alarm on the possibility of greater investor influx into Toronto and other Canadian cities in the wake of B.C.’s new tax.
August sales in Vancouver declined by 26 per cent on a year-over-year basis, despite the city’s home price growth of 31.4 per cent (up to $933,100) in the same period.
However, on Tuesday (September 20), Mayor John Tory stated that the conditions that triggered foreigner-driven price increases in Vancouver do not necessarily exist in Toronto at the moment.
“I know there's a problem with affordability ... and as yet, there's no one that's reached any conclusions or given me any advice that there's an identifiable problem that we can attach a solution to,” Tory said.
“We are watching it very closely and the main thing that I'm focused on ... is increasing the supply of affordable housing. That, I think, is the single thing that I know we can do.”
Tory confirmed that further details on the city’s housing strategy would become available to the public at the Affordable Housing Summit in Toronto on September 30.
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