Extra Taxes Barely Deter Asian Buyers

Photo: Flickr / Hamza Butt

For both concerned consumers as well as policy experts, it was hoped that the adoption of a foreign buyer tax amongst other new regulations would prevent an excessive amount of foreign buyers from buying properties within Canada’s hottest property markets. According to a new report released by China’s biggest online real estate browsing community, Chinese buyers are still heavily interested in purchasing properties in Canada for the purposes of investment. According to a statement released by the company’s president, Chinese buyers still consider Canada a solid place for real estate investment, even when taking the various foreign buyer taxes implemented in both Ontario and British Columbia into account.

Based on data released by Juwai, the cities that held the biggest sway for Chinese buyers were Toronto, Vancouver, Victoria and Ottawa. In addition, Canada is considered to be the fourth most popular destination for buying real estate out of ten countries, based on a survey undertaken by the company. The other states on the list from most to least desirable for the year of 2017 include the United States, Australia, Thailand, the United Kingdom, New Zealand, Germany, Malaysia and Spain. Singapore no longer is on the list this year, despite being in the top ten for the last three years – perhaps because of its heavily restricted buying policies concerning non-residents. On top of a fifteen percent foreign buyer tax, the city-state also does not allow the purchase of anything larger than a condominium property for buyers who do not actually live there.

In recent years, due to the threat of unaffordability looming in the country’s hottest markets – most notable in the Metro Vancouver and Greater Toronto Area – both the federal and provincial governments have been looking at measures to deter home prices from ballooning even further. As a result, the British Columbia government instituted a fifteen percent foreign buyer tax last August, which had a significant impact on home sales volume as well as property prices over the last several months. Recently, however, real estate trends have been steadily growing upwards once again, and recent statistics have even shown that the most expensive home prices have already swung past previous records set before the tax was put in place. In the Golden Horseshoe area, meanwhile, where the Ontario government has also implemented a foreign buyer tax in response to ballooning home price trends very similar to the ones experienced in Vancouver, evidence suggests that foreign investment has not decreased significantly either. 

Published Date: Oct 14 2017