Jim was recently interviewed by Jill Mahoney from Globe and Mail about the effects of Foreign Buyer’s Tax on Toronto. Here is an excerpt from the article:
In all, 3.8 per cent of homes sold in the city of Toronto were to buyers who were not citizens or permanent residents between mid-August and mid-November, down from 5.6 per cent for the previous three-month period.
In the wider Greater Golden Horseshoe region, 1.9 per cent of residential properties were bought by people from abroad, down from 3.2 per cent.
The government’s data come amid continued debate over the role of international capital in the Toronto area’s real estate market.
Some analysts and home buyers believe wealthy foreign buyers are pushing prices beyond the reach of many local residents, while the real-estate industry argues the main challenge is strong demand and a shortage of housing supply, rather than small numbers of non-citizens.
Foreign purchases began to fall in the vast area around Toronto after Premier Kathleen Wynne’s government introduced its tax in April, according to Finance Ministry figures. Before the move, the real estate market appeared to be overheating, as average home prices soared to nearly $1-million in the Greater Toronto Area. After the tax, the market entered a downturn.
The government on Wednesday said the overall housing market “continues to show stable growth,” while noting that Greater Toronto Area home resales fell 13.3 per cent and the average price dropped by 2 per cent last month from November, 2016.
Real estate agents who work with foreign buyers said many are waiting out the market’s turbulence.
“[The tax] forced everybody to the sidelines for no other reason than psychological because it was new and they wanted to see what kind of an effect a government intervention like that was having,” said Jim Burtnick, a Toronto broker who works with international clients
People want to make sure that they’re not catching a falling knife, that the sky’s not falling, and once they realize fundamentally nothing’s changed and everything’s pretty stable, I think you’ll see that it’ll pick up again.
Mr. Burtnick said foreign investment could also be down because some buyers are finding ways to avoid paying the tax, such as by registering properties in the names of relatives who are Canadian citizens or permanent residents. “People are generally pretty resourceful,” he said.
If you are interesting reading the rest of the article, head to The Globe and Mail site and read it here.