Article content continued

“The issue of foreign investment in the real estate markets of Vancouver and Toronto dominates cocktail party conversations. The good news is that we are not alone. Newspaper headlines in Australia, New Zealand and the U.K. are very similar to ours,” writes Tal. “The bad news is that policy makers in those countries are as confused about the issue as we are.”

With prices rising fast in Vancouver and Toronto, the debate over the impact is not likely to end soon. Toronto’s real estate board reported this month that April prices for existing homes were up 16.2 per cent from a year ago, while Vancouver prices were up 25.3 per cent during the same period.

Royal LePage added more fuel to the fire with a survey released Thursday that polled 250 of its realtors for the impact of foreign ownership. It found 24 per cent of realtors surveyed maintain that a quarter of the properties in their region were purchased by foreign buyers.

In Canada, foreign ownership can also be controlled at the provincial level — Prince Edward Island already places restrictions on out-of-provinces purchases.

Tal says other countries have also taken action on foreign ownership and notes in Australia, since the summer of 2015, foreign investors can receive permission to buy only if they are developing or building new housing stock and the property must be for their personal use.

New Zealand introduced new legislation to impose a capital gains tax on properties sold within two years of purchase, he adds. The economist points out the United Kingdom recently introduced a property capital gains tax of up to 28 per cent.