Few foreign buyers in GTA, real estate figures show

Non-citizens comprise less than 5 per cent of deals in month after tax introduced

Less than 5 per cent of the18,282 real estate deals in the Toronto and Golden Horseshoe area involved foreign buyers in the month after a new tax targeting them was introduced, the province reports.

The Liberal government implemented a 15-per-cent “non-resident speculation tax” in April, along with a number of other measures to help combat skyrocketing prices amid surging demand.

The figures released Tuesday cover transactions from April 24 to May 26 that could be subject to the new tax. Overall, 4.7 per cent of the 18,282 purchases were made by foreign businesses or buyers who weren’t citizens or permanent Canadian residents.

Tim Hudak, who heads the Ontario Real Estate Association, said the province’s statistics are close to the 4.9 per cent previously reported by the Toronto Real Estate Board, adding that “the ultimate solution to addressing the barriers facing Ontario home buyers is to increase housing supply.

“The best way to increase supply is seeing more of the ‘missing middle’ type homes being built like townhouses, stacked flats or midrise buildings.”

The province released the foreign buyer numbers a day before a housing forum — bringing together experts, economics and community groups — was to meet for the first time in a bid to find ways to make housing more affordable and to address demand.

PC finance critic Vic Fedeli said the Liberals finally have some data on the issue, providing “some evidence to finally base their decisions on.”

However, he added, “it’s awkward for the government, they can never know what impact their policies have — all they wanted to do was rush out with an announcement so they could have a photo op,” he said of the April announcement. “What concerned us the most about this whole thing was the lack of preparedness and lack of data,” he said in a telephone interview. “It was very loosely put together and that always worries us.”

Fedeli said rather than raising taxes, the government needs to deal with the regulations and red tape that developers say are slowing down housing projects.

When Ontario’s speculation tax was announced, foreign purchasers were thought to comprise about 5 per cent of buyers. The tax is similar to one in British Columbia, introduced a year ago, and covers Greater Toronto, Hamilton, Niagara, Kitchener-Waterloo, north to Barrie and east to Peterborough. Refugees, or those whose spouse is a citizen or permanent resident, are among those who are exempt from the tax.

The province’s 16-point Fair Housing Plan — which includes the speculation tax, $100 million in land for 2,000 new homes and a doubling of the land transfer tax rebate for those entering the market — “sought to stabilize the market and give more individuals and young families an opportunity to buy a home. Early indicators show that the plan is working,” said Ontario Finance Minister Charles Sousa.

Indeed, the Canadian Real Estate Association reported a 25.3 per cent drop in sales between April and May in Greater Toronto, calling it the biggest monthly drop in five years.

“The ultimate solution . . . is to increase housing supply.” TIM HUDAK CEO, ONTARIO REAL ESTATE ASSOCIATION