As per Barry Kainth, President and CEO of Galaxy Gate (GG), Canadian real estate market expert, around 20% of international buyers are buying real estate properties in Ontario. And, this 20% do not reside on the property and they are not even Canadian Citizens. The involvement of international buyers has increased the cost of the real estate impacting the whole real estate market.
Buyers are finding it difficult to get a home at a reasonable price in Ontario real estate market as costs have been raised to a gigantic figure in the year 2017. The leftover property for them is the condo apartments, which are also owned by the international buyers. Condo apartments are buyers’ alternative to a fresh housing unit. Around 6% drop in the buyer transaction was noticed last year. This situation came because of the lesser units available for rent.
No one thought that international investors would impact the real estate market that much. The situation of crises is there and properties are more and more properties are becoming unaffordable since their involvement in Canada’s real estate market. If this goes on, the local buyers will be washed away completely from the market. They won’t even dream of having their own home in Canada. They openly feel and say that this real estate has abandoned them.
The government of Canada has taken an initiative in this regard and introduced a new tax scheme for the international investors. The new tax scheme has actually made an impact on the regional real estate market in Canada.
Douglas Porter, Bank of Montreal’s chief economist, said that the limited supply and vigorous demand gave air to the GTA’s affordability concerns. “Toronto would have been strong in any event, but I think foreign interest has contributed to the market that we’ve seen, especially in the last six months”.
Mr. Porter said that if the Ontario government is genuine about cooling off the GTA’s real estate sector, it needs to address demand too. “Why not try to control demand, especially demand that isn’t coming from domestic buyers, at the same time as strengthening supply? We need to work on both sides.”
· Numbers of International Buyers are Increasing
· Decline in Rental Properties
· Rise in Property Prices
· Local Buyers Can’t Afford Property
· Introduction of New Tax Scheme