I never made any case that a foreigner was in some way implicitly more evil (someone else's words) nor have I made some sort of quasi-anti-foreign stance based solely upon the fact that someone is different or foreign. My argument is that someone who lives in Canada and better yet, lives in the area they invest in, has a much more immediate stake in the health of our market. If a foreign owner dumps 50 condos in a new development because he/she needs the equity for another RE purchase somewhere else, or because he needs the cash, whatever, he could care less what that will do to the local or even larger Canadian economy. He doesn't care if it contributes to a massive equity loss for thousands of Canadian homeowners (which could easily happen if this downturn becomes a snowball) = furniture store closings, restaurant closings, massive job losses and a much worse economy. It's simply a buy/sell purchase - like a stock, he has his money and his own city is non for the worse. I am making no judgement of the person or "fuzzy furriners". I would do the same if I were them....however...
A local owner who lives in and makes his money from a healthy RE market - wants decent rent, doesn't want his equity to shrink because of a glut of condos coming on the market, etc., will think twice before doing this because he understands he may be hurting his own investment for short term gain and the area and country he lives in. Maybe he'll put 10 on the market and wait because he knows it can seriously undermine everything else his life is built around. A local owner has a stake in the much larger Canadian and Torontonian economy and because he is absolutely affected by this, he will think twice.
Housing is a fundamentally different type of equity than any other that exists. A responsible government - while wanting to encourage foreign investment in many areas - should not regard housing as investments, but social assets.
And I did mean TCHC. Toronto Community Housing Corporation should start buying up depressed condos in all these new buildings and using them for social housing - would be an incredible integration into existing well-moneyed (mostly) communities and is exactly the type of mixed housing that's good for everyone. People who are worried about social housing in their brand new condo buildings should look around the world and see all the examples of places that require it (as close to home as Vancouver) in all new buildings. It's a great idea that would help lower our social costs, boost our economy and would be win win all around.
