Ef­fects of for­eign buyer tax yet to be seen

9.1 per cent of homes sold in York Re­gion bought by non-Cana­di­ans in May

Richmond Hill Post - - News - by Jes­sica Wei

Be­tween April 24 and May 26, 2017, for­eign buy­ers ac­counted for 9.1 per cent of homes bought in York Re­gion, ac­cord­ing to a new re­port from the On­tario Min­istry of Fi­nance. This fig­ure is higher than that of Toronto, where for­eign buy­ers ac­counted for 7.2 per cent of home sales.

Th­ese num­bers re­flect the pe­riod di­rectly af­ter the prov­ince im­ple­mented a 15 per cent sur­tax on for­eign buy­ers on April 20. How­ever, ac­cord­ing to Ja­son Mercer, the di­rec­tor of mar­ket anal­y­sis at the Toronto Real Es­tate Board (TREB), it’s too early to see how this sur­tax has af­fected the mar­ket in both Toronto and York Re­gion, which has seen a dra­matic dip in home sales since July 2016.

“The jury is still out on the over­all im­pact of what this pol­icy move is go­ing to be, on not only sup­ply, but also on sales,” said Mercer, “[be­cause] the deals [re­flected in the min­istry’s lat­est re­port] were prob­a­bly signed be­fore the im­ple­men­ta­tion of that pol­icy.” The hous­ing mar­ket in Rich­mond Hill has seen dra­matic move­ments in 2017. Ac­cord­ing to TREB’s data, home sales dou­bled be­tween Jan­uary and March. How­ever, July has seen a 53 per cent de­cline in sales since.

“Peo­ple only think it’s the 15 per cent tax that’s cre­ated the change in the mar­ket,” said Daryl King, a re­al­tor with Royal LePage. “It was start­ing to do that al­ready. The mort­gage rules have got­ten tougher, and that’s had an ad­verse af­fect on ev­ery­body too.”

Ac­cord­ing to King, the dip in home sales was in­evitable af­ter the dra­matic in­creases from the be­gin­ning of the year.

TREB is wait­ing un­til more data comes out be­fore it makes a call on how much the for­eign buy­ers will con­tinue to shape the hous­ing mar­ket. Ac­cord­ing to Mercer, it can take from six months to a year to get a com­plete pic­ture of the im­pact of a hous­ing cor­rec­tion pol­icy.

“We cer­tainly see some buy­ers take a step back, but it’s pos­si­ble at least some of th­ese in­di­vid­u­als who are on the side­lines may move back into the mar­ket­place over the next 12 months or so,” said Mercer. King sees th­ese next few months as an op­por­tu­nity for buy­ers. “Prices will be priced more cor­rectly,” King said. “You’ll see houses be­ing sold around the list­ing price. It’s go­ing to take longer to sell. But that’s what a nor­mal mar­ket is: start to fin­ish, it was al­ways three to five months any­way. So we’ll prob­a­bly go back to one of those types of mar­kets, and that’s OK.”

It’s go­ing to take longer to sell. But that’s what a nor­mal mar­ket is.”

Re­al­tor Dar­ryl King in front of one of his Rich­mond Hill list­ings

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.