Whether we like it or not, here in the GHA (Greater Hamilton Area) we’re largely affected by what happens in the Toronto Real Estate Market. One recent study showed that approximately 35-40% of all sales in the Hamilton area are from the GTA due to unimaginably high real estate prices. People are being pushed outside the city. We believe this trend will continue as long as things stay the way they are.
The province of Ontario and we ourselves see that young first time home buyers are experiencing great difficulty purchasing a home. Next week the province plans to meet to discuss possible solutions. We are uncertain what these solutions could be but one thing is for sure: They do not want to adversely affect areas in the province that are not experiencing rapid price increases. (Those outside the GTA & GHA).
Really the question they face is:
1) Implement a new foreign buyer tax (like Vancouver) to curb sales and potentially drive prices down? (which has actually happened) or 2) Implement new land transfer tax breaks (or exemption) for first time buyers to make purchasing a home easier? Option 1 could be a solution but according to Finance Minister Charles Sousa more data is needed to calculate the risks. Option 2 sounds promising and I’m all for helping the little guy but would it successfully reduce house prices and affordability? Fact is, it could do the opposite by feeing more buyer demand in a market that has no such shortage.
Urbanation.ca recently released a study that stated 52% of all new condo’s in the Toronto area are purchased by investors/speculators . Thats a huge about of properties. There is one reason investors buy real estate: to make money. When investors buy up inventory, they feed the supply issue and drive prices up.
Could a possible solution be to add a buyer tax for anyone looking to purchase a home for investment purposes?
This would likely reduce pressure on the market and open up opportunities for local Canadian buyers.
Buy hey, I could be totally wrong. What do you think the province should do about these soaring real estate prices?
All of the above?