Ontario's Foreign Buyer Tax Causes Few Ripples on Soaring Home Prices
In an effort to pump the brakes on soaring home ownership costs, the Government of Ontario recently introduced a Foreign Buyer Tax, which has done little to curb rising home costs in the Greater Toronto Area.
A CTV News report, citing government data, showed the 15% tax imposed on foreign buyer transactions lowered transactions to 4.7% of the housing market from April 24 – May 26, compared to 4.9% previously.
Unlike Vancouver, where house prices are driven up by a large percentage of foreign ownership, foreign investment isn’t nearly the contributor to inflated home costs in the GTA.
According to the Toronto Real Estate Board, the average selling price of a home in the Greater Toronto Area for May 2017 was $863,910, up from $752,100 compared to May of last year.
With the demand for home ownership significantly higher than the amount of homes available for ownership, Ontarians are reaching a boiling point when it comes to the housing market.
Research by the Ontario Real Estate Association showed 37% of Ontarians strongly believe housing affordability belongs on the agenda for the upcoming provincial election. Thirty percent of the same people polled said they’d be more likely to vote for one party over another, based on their takes relating to solving the housing cost crisis.
Who’s Affected Most by the Housing Prices in Ontario?
Again, according to research by OREA, nearly 60% of prospective home buyers in Ontario are in the millennial age group.
For millennials born in the 1980s and 1990s, who are hopeful of owning their own home, unprecedented housing costs in Ontario makes the dream virtually impossible for the majority who would be deemed ‘’in the market’’ right now.
The need for affordable housing in Ontario has never been higher. With foreign ownership not playing an overly prominent role in the market, something else has to give.
That something could have ramifications in the next provincial election.