Prime Minister Stephen Harper’s election campaign promise to collect data on foreign ownership in the real estate market has gotten mixed reviews.
Last week in Vancouver, where the average price of a detached home is over one million dollars, Harper said, “If such foreign, non-resident buyers are artificially driving up the cost of real estate, and Canadian families are shut out of the market, that is a matter we can and should do something about.”
If re-elected, Harper promised his Conservative government would spend $500,000 collecting data on how many foreign investors are buying homes in Canada.
Many welcomed Harper’s promise. Vancouver-based real estate analyst Richard Wozny told Maclean’s there’s no way to rationalize the local market, where sky-high prices have made it impossible for residents with average incomes to buy homes. “Data may help explain things,” he says. “It would help you understand price appreciation and you could then design something that would moderate the impact, making it more in line in the local market.”
CIBC economist Benjamin Tal called the promise “very positive,” telling CBC that “regardless of who wins this election, this is something that we desperately need.”
Meanwhile, Harper’s sudden focus on offshore buyers has some worried. “We need the foreign buyers because they are buying all the high-end real estate,” Joseph Montanaro, an agent with Sotheby’s in Montreal, told the CBC.
As to what actions should be taken if new research found foreign investment to be more extensive, some believe it should be regional in nature.
That’s because in some markets foreign investment is desirable. “For places that depend on tourism, the foreign ownership is actually pretty important, because those are tourists that are likely to keep coming back,” said Tsur Somerville, director of the UBC Centre for Urban Economics and Real Estate.
*Author John Tenpenny