Living in Toronto, I can tell you first hand the havoc Asian money has wrought on the housing markets in both Toronto and Vancouver. Having a real estate neighbor friend, I can provide lots of stories for you - just one example, an Asian couple came to Toronto for the week to buy houses, not a house, but houses, and not moving here, just investing. They purchased, with cash, 6 houses in that week and on the way to the airport they purchased another - no offers on the house yet they paid $100,000 over the asking price. All of these homes from this couple and hundreds like them are being left vacant or are being rented out by absentee landlords who care little about the upkeep of the property. It is simply an investment and a place to park all their cash, lots of it ill gotten cash. In effect, housing in Canada is being used as a vehicle to launder illegally acquired cash.
In Toronto, this past year, sales have increased by 32% over last year and the average price of a detached home is now over $1.3 million and rising. That has risen substantially this past year, since Vancouver has instituted their 15% surcharge on foreign sales. A young Canadian couple, just starting a family, finds it virtually impossible now to find the down payment necessary to qualify for a mortgage and with very little rental housing being built, they are left trying to rent condos at exorbitant costs. And those condos - many new condo buildings in downtown Toronto are upwards of 80% owned by speculators and foreign investors who are renting the units for a quick profit and turnaround or renting them out on AIRBUS with lots of problems for long term tenants.
I fully support what Vancouver is trying to do and I'd support the same in Toronto. I'm all for free enterprise, but this isn't free enterprise - it's a foreign takeover of the housing market and when it crashes, and when interest rates rise it will, innocent people will be greatly harmed.
