Tracking overseas ownership of real estate was something that the federal government wanted to do since a long time. The point is to take a closer look at the extent of foreign ownership of real estate across the nation and lack of data on who is actually buying real estate across Canada has always been an issue. Last autumn during the federal election campaigns, there was a mention of limiting the amount of overseas ownership of property, however the Liberal government has not made any such mention of applying any kind of limits to real estate ownerships.
There is a general idea that the foreign investments in real estate are the root cause of the souring prices of properties across Canada. This has especially affected Vancouver and Toronto. In the Liberal Budget for 2016 – 17, the finance minister has allocated $500000 to periodically gather all the data for foreign home purchases all over Canada. However, the resources needed to gather such amount of data are too much and the budget too less in comparison. This makes the National Bank of Canada feel that this may not work out.
The National Bank also feels that this should not be a government led initiative. It should be an initiative of the local governments such as municipal and provincial governments. These local governments could keep a track of such data more easily.
Well, another thing to take into consideration here is that – cities like Vancouver actually see a great rise in the real estate prices year after year. Other cities such as Quebec do not see real estate prices rise so frequently and exponentially. This is therefore not a pressing issue for these cities. The finance allocation for tasks such as gathering real estate purchase data by foreign investors thus cannot be a common budget passed by the government. The local municipal governments should be able to better gauge this need and allocate resources for this purpose. The overall task of gathering such statistics will be simplified and the budget will be prudently allocated.
According to the National Bank’s report, Chinese buyers attribute to at least 33% of Vancouver’s real estate purchases and 14% of Toronto. This hypothesis was derived from American Data.
All the above data only means that there is a need to analyze the real estate ownership across the country. This definitely does not mean that foreign ownership is the root cause of the rising prices of real estate in Canada. It’s just a rumor. Even though on the surface it seems like foreign investors are the cause of the price rise, there is no concrete data to prove it. This is exactly why government is stressing on the need for such kind of data. On the other hand, if there is such kind of data available, it would not mean that there is a need to limit this foreign investment. Because, if overseas investors sold out their properties, it would definitely affect Canada’s economy in some or the other way!
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