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Speculation has swirled that many of the would-be Vancouver buyers would head to Toronto to invest and avoid the punitive tax but the Ipsos results show only two per cent of realtors have been involved in a transaction for a foreign buyer which they knew was impacted by the foreign buyer tax in British Columbia.

“An additional land transfer tax on foreign buyers could have unintended consequences, including tighter market conditions and stronger price growth in neighbouring communities/regions without a tax, less rental supply, because the number of investors looking to purchase and rent out a property could decline and potential negative impact on immigration,” said TREB. “It is important to remember that population growth in the GTA, on net, is driven by immigration.”

While Vancouver also has a vacant home tax that went into effect on Jan. 1, the TREB survey found a large majority of foreign buyers in the Toronto area plan to use their homes. Among those buyers, 40 per cent purchased a home as a primary residence, 25 per cent to rent out to tenants while another 15 per cent bought for a family member to live in.

Overall, TREB is forecasting more than 100,000 sales for the third consecutive year in 2017. Between 104,500 and 115,500 home sales are expected this year, with a point forecast of 110,000 – down slightly from 113,133 sales reported in 2016.

“While changes to federal mortgage lending guidelines and higher borrowing costs may impact some would-be home buyers, the big impediment will be the lack of inventory,” said Jason Mercer, director of market analysis for TREB. “Active listings at the end of December were at their lowest point since before the year 2000. It is unlikely that the shortage of listings will improve to any great degree over the course of the next year. This will put a ceiling on sales growth.”