17 September 2019

In a recent interview, Barclays Capital analyst John Aiken noted the tax will become another additional factor only slightly reducing the market demand.

“In reality, with the inflexibility of foreign buyers’ demand, this measure will hardly have a significant influence on home prices or the real estate market,” – he said.

Bank of Montreal chief economist Doug Porter shares this opinion, pointing that the tax will not help Canada’s real estate market avoid coming back to the previous overheated state.

“I believe the cities other than Vancouver and Toronto may feel the impact, but in my opinion they are not as affected by non-resident buyers,” – Porter added. “The main drivers of the housing market are healthy job gains, strong population growth and lower long-term mortgage rates.”

Nevertheless, Porter says the measure could be a good message that Canada will not let wealthy foreigners push other potential home buyers out of the market.

“Amid housing affordability issues, especially in large cities, we can’t afford any speculation affecting the market”.