Canadian cities such as Vancouver B.C. and Toronto have been hot spots for foreign buyers for years. With ample dining and entertainment options alongside beautiful, luxury homes, it’s no surprise these cities boast the hottest real estate markets in the country. Both cities have seen a dramatic increase in housing prices in the recent years as a result. It’s basic economics – lack of inventory and high demand means the prices will continue to rise. So the condos for sale in downtown Toronto are great examples of the hot market. Despite multiple new builds, developers can’t seem to be able to keep up with the demand.
To combat skyrocketing home prices, the city of Vancouver recently issued a new tax on foreign home buyers. If you’re not Canadian, you’ll be paying the government an additional 15% of the total price of the home you purchase. While it’s still too early to determine the effectiveness of this tax in regards to lowering real estate prices, there are a few outcomes that can already be observed.
Understanding the Benefits of Vancouver’s New Foreign home buyers Tax
There’s been talk of Toronto officials issuing a foreign buyers tax similar to Vancouver’s in hopes of controlling the ever-rising price of homes and condo for sale downtown Toronto. While this may be beneficial to residents looking to buy, there are several reasons why keeping Toronto free of foreign home buyers taxes could benefit locals.
- The foreign home buyers tax has lead to an increase in Toronto home sales.
Since August of 2015, the city of Toronto has seen a 23.5% increase in real estate sales. In a single month, the Toronto Real Estate Board recorded nearly 10,000 sales. Many believe sales will continue to rise, as a result of Vancouver’s new tax on foreign buyers. While it is still early to determine the outcome of the tax, we think it’s safe to say that the Toronto market is scorching and won’t cool down anytime soon.
Vancouver has seen home sales drop 26%, but prices have continued to climb. The benchmark price for residential properties in Vancouver is now $933,100. This is the opposite effect policy makers hoped the foreign buyers tax would have on the market. Only time will reveal the true outcome of the tax.
- Foreign buyers in Toronto help boost the local economy.
A hot real estate market is not only good for home owners looking for a return on investment, it’s also beneficial to the local economy in several ways. With foreign money coming in, we’ve seen an increase in the health of local, small businesses and the rental market.
As a Toronto resident or investor, it’s better late than never. Now is a great time to invest in the Toronto real estate market. With many foreign buyers being priced out of Vancouver, your return on investment will most likely continue to grow. If you’re interested in purchasing a condo for sale in downtown Toronto, call The Davies presentation center at 416-873-0862. Our team would love to tour you around our luxury condos and help you find the home of your dreams.