Speculation tax yet to scare away foreign buyers: Sousa

The percentage of foreign buyers in the Greater Golden Horseshoe is still where it stood before Ontario brought in its 15 per cent tax on non-residents, finance minister Charles Sousa said Tuesday.

He said it’s too early to comment on the impact of the tax — the province has data from about two to three weeks of activity based on voluntary submissions — but there hasn’t been much change in the percentage of buyers from abroad purchasing property in the area that is home to nine million people, since the tax was brought in April 20.

“We have different points of view from third-party sources but what I’m seeing up to this point that it’s in the same range,” Sousa told reporters, after earlier telling a real estate audience he gets reports it’s as high as six per cent. “British Columbia seems to think they have (a higher percentage of foreign buyers). They are providing monthly reporting on these activities and I would like to provide something similar.”

Ontario brought in a 16-point plan to try to improve affordability in the region, including the non-resident speculation tax and more comprehensive rent control rules, after prices in the Greater Toronto Area soared 33 per cent in March from a year ago. Since then, May results from the Toronto Real Estate Board show sales have declined 20.3 on a year-over-year basis and prices dipped 6.2 per cent in one month.

But the tax is proving popular with a new poll released Tuesday from the Ontario Real Estate Association finding 81 per cent of people in Ontario support the tax measure.

The poll was conducted between May 29 and 31, 2016, on behalf of OREA, the Ontario Home Builders’ Association and the Federation of Rental-Housing Providers of Ontario, and is based on a sample of 2,003 Ontarians. The poll is accurate to with 2.5 percentage points, 19 times out of 20.

The survey found 85 per cent agree, 37 per cent strongly and 48 per cent somewhat, that Ontario parties should address home affordability in their platforms with an election a year away. Another 80 per cent say they are more likely to vote for a party whose platforms promotes home affordability. Both percentages rise for first-time buyers.

Sousa said it’s too early to tell whether the new tax is deterring foreign investment. “We don’t know to what degree that investment started and is ending,” said Sousa.

Tim Hudak, chief executive of OREA, says the bottom line is southern Ontario just doesn’t have enough supply to deal with all the demand coming into the marketplace.