Baby, we got a bubble!?

[ponyboy]

Are there any efforts afoot in Canada to find out the identity of all-cash luxury home purchases through title insurance records? This article talks about early efforts in the U.S., suggesting 30% are potentially laundered. Just the effort to collect this information has materially affected sales in the markets being monitored.

http://wolfstreet.com/2017/02/24/how-much-money-laundering-in-us-housing-market/

 

[TheKingEast]

Welp, looks like Ontario is considering a foreign buyer tax. The government is so lazy.

 

[Migos]

Why does that make the government lazy?

 

[homelessgeneration]

Why does that make the government lazy?

Because this has been a problem for years, and they are just now humming and hawing. I'm not saying that a foreign buyer tax is "the" solution or even "a" solution.

I think I can speak for a lot of us when I say the Government really does not have our best interests in mind.

 

[Migos]

Because this has been a problem for years, and they are just now humming and hawing. I'm not saying that a foreign buyer tax is "the" solution or even "a" solution.

I think I can speak for a lot of us when I say the Government really does not have our best interests in mind.

Oh, absolutely. I thought the previous poster was implying that the government should continue to do nothing.

 

[TheKingEast]

Because this has been a problem for years, and they are just now humming and hawing. I'm not saying that a foreign buyer tax is "the" solution or even "a" solution.

I think I can speak for a lot of us when I say the Government really does not have our best interests in mind.

Bingo.

 

[TheKingEast]

Oh, absolutely. I thought the previous poster was implying that the government should continue to do nothing.

The government has done quite a bit actually.

 

[shal1n]

The Fiberals and Kathleen Wynne are on their way out. Peak inept

 

[Auraz]

Welp, looks like Ontario is considering a foreign buyer tax. The government is so lazy.

It makes no sense. China Effective January 1st, 2017. Has closed off how much money you can bring over seas. I hear its $50,000 USD per Person Per Year and it must be immediate family.

 

[detroitbootybass]

It makes no sense. China Effective January 1st, 2017. Has closed off how much money you can bring over seas. I hear its $50,000 USD per Person Per Year and it must be immediate family.

China has been doing that for many years now - they revisit the policy each year and they have kept the same $50,000 annual limit.

The big Canadian banks (and smaller players too, I assume) help Chinese citizens elude the governmental money export controls. Since they get a piece of the action, the banks don't want to stop the money flowing through their coffers by reporting the transactions to FinTRAC (they are the Canadian agency that tracks money laundering).

 

[jozl]

I don't give a rat's ass if someone wants to speculate in the stock market, the art market, baseball cards, etc. BUT, if I were king of the forest ,I would slap a 95% tax on non owner occupied residential real estate. Housing, health care, food, are all necessities. It's criminal the way our government is letting the livability of our biggest city erode. I also like the idea put forth by Bernie Sanders, ie, tax each stock market trade 1/4 cent per share (.025 cents). It would greatly increase government coffers but only cost the casual investor a few dollars per year. Big institutional investors would pay much more due to massive volume. As it stands, all of the bs activity that occurs everyday in stock markets goes untaxed. Speculation has it's place in a modern mixed economy to raise funds but not at the expense of society at large.

 

[Palma]

China has been doing that for many years now - they revisit the policy each year and they have kept the same $50,000 annual limit.

The big Canadian banks (and smaller players too, I assume) help Chinese citizens elude the governmental money export controls. Since they get a piece of the action, the banks don't want to stop the money flowing through their coffers by reporting the transactions to FinTRAC (they are the Canadian agency that tracks money laundering).

So as I have 32000 euro bond with an Italian bank and want to cash that out and transfer the money into my Canadian bank account (through an online transaction), do I need to worry bank will report this money to the government here?

 

[Palma]

China has been doing that for many years now - they revisit the policy each year and they have kept the same $50,000 annual limit.

The big Canadian banks (and smaller players too, I assume) help Chinese citizens elude the governmental money export controls. Since they get a piece of the action, the banks don't want to stop the money flowing through their coffers by reporting the transactions to FinTRAC (they are the Canadian agency that tracks money laundering).

If they have been doing it for years, obviously they are lax or all this money was transferred over to Canada a long time ago as investors must have been hearing that the Chinese gov,t would be introducing the measures

 

[ponyboy]

Demand fuels Toronto house prices, not lack of supply, study finds
JANET MCFARLAND
The Globe and Mail
Published Monday, Mar. 13, 2017

http://www.theglobeandmail.com/real...t-lack-of-supply-study-finds/article34279980/

study: The report, written by Simon Fraser University assistant professor Josh Gordon for the Ryerson City Building Institute in Toronto

some quotes form the G&M article:

“In sum, there is no compelling evidence that insufficient housing is being built relative to demographic needs,”
...
The appropriate response is to cool speculative demand by shifting expectations, rather than adopting a strategy to spur more building in undeveloped areas, which will not tame prices and cannot be reversed, he concludes.

While demand could be cooled by raising interest rates or further tightening mortgage rules, Dr. Gordon says both solutions are too blunt because they would hurt the economy broadly and aren’t needed in markets outside the Vancouver and Toronto areas.

Instead, he endorses introducing a foreign-buyer tax in Toronto, similar to the one adopted in Vancouver last August.
...
He also endorses a progressive property-tax surcharge, which is an additional tax on properties owned by people who are not working in Canada.

 

[Eug]

As of February, 2017, the Teranet House Price Index is 222.46, which means house pricing has doubled in less than a decade. This has special meaning to me, since I bought when it was 111.61, in August of 2007. The current index is 1.99X the August 2007 index. Wow.

And with those crazy y-o-y price increases, yeah, the bubble is finally here. Still, I don't see even a foreign buyer tax collapsing the bubble. There is still the possibility of flat-lining or mild decreases even with that foreign body add-on tax, mainly because since the bulk of the demand is from domestic buyers in Toronto.