WATCH: Before he left Vancouver, Harper used the backdrop of Canada’s most expensive city to make some promises about real estate. He says he’ll raise the amount first time home buyers can withdraw from their RRSPs to $35,000 and he’ll look at how foreign buyers are influencing the market, and driving up prices. Robin Gill reports.
VANCOUVER — A re-elected Conservative government would spend half a million dollars next year to figure out just how many foreign investors have eaten up condos and homes across Canada, many of them sitting empty year-round.
The spending Stephen Harper promised Wednesday could ultimately lead to strict rules about what kinds of homes — existing or new — foreign investors are allowed to own.
Harper suggested that the Tories were ready to work with the provinces to make sure that foreign, non-resident investors only buy homes that ensures the “availability and affordability of homes for Canadians.”
Campaign material provided by the Conservatives pointed to rules in other countries that force foreign investors to only purchase homes under construction, or to limit home ownership for foreign nationals to just the time that they live in the country.
“There are real concerns that foreign, non-resident real estate speculation is the reason some Canadian families find house prices beyond their budgets,” Harper said at an event in Vancouver, the urban skyline looming behind him.
“If such foreign non-resident buyers are artificially driving up the cost of real estate, and Canadian families are shut out of the market, that is a matter we can and should do something about.”
About 15 per cent of the condo market in Vancouver sits empty year-round by some estimates, with the owners sitting on the properties hoping to make a profit as the prices of homes rise.
The problem is that many of the estimates of the concentration of home ownership are just that, estimates, because governments haven’t historically tracked the level of foreign investment in Canadian markets, Harper said.
Harper said there are serious concerns that foreign investment is making home ownership unaffordable for many Canadians.
A home is the biggest investment and asset for many Canadians, he added, which is why a re-elected Conservative government would ensure more of them can realize the “dream” of home ownership.
Those rapidly rising costs of homes in places like Vancouver have raised concerns of a housing bubble in Canada’s hot housing market.
The Bank of Canada has issued warnings about the risks of a housing correction due to overvalued real estate market in some areas, suggesting prices are overvalued between 10 and 30 per cent, but it has maintained the sector is likely headed for a soft landing.
Last month, the central bank said the robust housing markets in B.C. and Ontario — in terms of both resale activity and new construction — were a result of rising demand whipped up by “historically low” interest rates.
The bank’s latest monetary policy report also identified foreign investors among the groups fuelling the strong market in those regions.
Harper also promised to raise the amount first-time home buyers can take out of their registered retirement savings plans for a down payment — $35,000, up from the current $25,000 limit.
“Home ownership is good for Canadian families, it’s good for Canadians communities, and it’s good for the Canadian economy, which is why our government believes in helping Canadians achieve it,” he said.
More than 2.7 million Canadians have withdrawn money under the program from their retirement savings plans to help pay for their first home.
Expanding the withdrawal limit will cost the federal government an extra $30 million per year in lost taxes starting in the 2017-18 fiscal year, the Conservatives say.
Harper was scheduled to travel to Edmonton later Wednesday for a rally.