Foreign demand for real estate shifting from Vancouver to Toronto

Foreign demand for real estate shifting from Vancouver to Toronto


15 per cent tax on foreign buyers in Vancouver is considered a factor in pushing housing prices down


VANCOUVER (NEWS 1130) – TD Bank is forecasting two different futures for the Vancouver and Toronto real estate markets: prices are expected to slip in Vancouver while they continue to climb in Canada’s largest city.

The TD report predicts a 10 per cent correction over the next year, but that would still leave prices much higher than they were a couple of years ago.

TD Bank economist Diana Petramala says “Vancouver has embarked on what is expected to be a modest correction that will be reinforced by the recent implementation of the land transfer tax on non-residents.”

UBC Housing economist Tom Davidoff agrees the 15 per cent tax on foreign buyers recently brought in by the provincial government is one factor pushing Vancouver prices down. “I think it’s hard for anybody to believe that the tax has been a positive for the Vancouver market in terms of price pressure. It almost surely has been a negative, but exactly how negative’s tough to get a read on.”

Bank economists expect some foreign demand may shift to Toronto, unless the Ontario looks at a similar tax.

Davidoff says another difference between the two markets can be seen when you look at the current average home price in both places. Vancouver prices are already extremely high, while Toronto still has room to grow.

Lastly, Davidoff says Toronto’s increase seems more tied to market fundamentals. “Toronto is a terrific labour market, so even if foreign demand were to go away, those prices are maybe sustainable by rents and incomes.”

TD doesn’t see the climb continuing in Toronto forever. It is forecasting a soft landing for both real estate markets over the next few years.

No comments

Post Your Comment:

The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Real Estate Board of Greater Vancouver (REBGV), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the REBGV, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the REBGV, the FVREB or the CADREB.