Imposing tax on foreign investors is not a step Ontario Premier Kathleen Wynne is willing to make as according to her, foreign investors play just a minor role in the housing prices. Taking a closer look at the Toronto records, it can be seen that although foreign investors are important in the housing market, they are a limited factor in driving up housing prices.
There are other factors that are responsible for the increases in housing prices and the demand for homes. Most investors presently are not buying homes to live in, rather they are buying houses as investments to make profits.
This situation has lead many upcoming investors to be in high competition with people who desire to buy a home to live with, in a market that have limited rate of supply.
Records have also shown that local investors make up 25% of the demand for residential real estate and this figure comes as a surprise to many and is even far worrying than that of foreign investors.
In comparison, foreign investors only amount for 5% to 10% of home purchases in Toronto area. But according to Myers an increase in local investor’s involvement in the housing market is not a major issue if consideration is taken about the current housing market. He added that “it’s is expected to have more investors as the housing prices are constantly on the increase.’
John Pasalis, president of the real estate brokerage explained that, information is a vital tool to aid buyers and investors get a better understanding of the housing market. There is also a huge demand for houses by investors.
The main aim of investors is to attract buyers to markets that they had not actually thought of and this in turn will increase on the demand. This will also lead to a higher increase in the housing prices.
During an interview, Wynne, was asked if she was also going to impose tax on foreign buyers but she mentioned that her main concern presently was to solve the root of the problem first, and that is to make home much more affordable for first-time buyers. Further questions were asked in regards of the role of the government in cutting down on the effects investors have on housing prices and she replied by saying that presently there is not much that can be done about the situation.
She concluded by saying that she is doing her best to prevent taking an action that will negatively affect the home worth of people who already obtained ownership.