The Canadian federal government has a hard-on about spiking prices in the housing sector, especially in the Toronto and Vancouver area. The government apparently doesn’t like foreign ownership, which is a form of economic nationalism. Maybe the next step is only existing residents in those cities can buy housing to keep “foreign domestic” buyers out. I suppose the Canadian government thinks all foreign money is dirty. They are also making it harder to get financing, though the government’s easy money policy is encouraging borrowing. Maybe the foreign buyer purchase tax isn’t really to “correct” the problem but to painlessly raise revenues, i.e., tax the people who don’t vote.
Also lost in this is that for every buyer there is a seller who is benefiting from the higher prices. If I was a seller, I don’t think I wouldn’t like to see the government unilaterally reducing my price. And, the sellers would probably buy another place in Canada and possibly even spend some of the “ill gotten” profits in Canada. It’s like the US government punishing savers with low interest rates – how stupid are they to be fiscally responsible anyway.
Finally, doesn’t the government know that housing, and especially housing price spikes, contribute the country’s general economy. Housing is helping support the country’s flagging energy area.
Does Canada really want to preside over a collapsing housing sector?