CIBC economist: “Tax Vancouver’s foreign real estate investors”

June 22nd, 2016  |  Home

Just as the Toronto and Vancouver housing markets have reached peak levels in pricing, there has never been quite as hot a topic as it is these days. Everyone is talking about the affordability problem, but no one agrees on just how to address it yet.

In Vancouver there’s been a particularly strong focus on the effect foreign buyers are having on the market. The conversation is so loud that the federal government itself vowed to look into the matter and even tightened down payment rules to help cool things off in high price markets like Vancouver and Toronto. CEOs and economists at major banks have expressed numerous opinions on what’s happening next with housing and petitioned the government to implement more policy.

Now CIBC’s deputy chief economist Benjamin Tal has called for the taxation of foreign real estate speculators, thinking that it would be the best way to cool the market without bursting the bubble.

According to CBC, Tal isn’t against foreign investment. But he thinks that those who purchase real estate in Canada without living or working here should be giving back to the economy in some way.

A lot of anecdotal evidence has blamed foreign buyers for hogging empty homes while Canadians can’t even afford to get into the market. However, there’s been little actual evidence found of this being a widespread issue in either Toronto or Vancouver.

Tal acknowledges that supply is now the main problem in the cities, but says that due to limited ability to address supply issues, “We are trying to fight supply issues with demand solutions.”