Toronto House Price Bubble Hit with 15% Foreign Buyers Tax. “Property Scalpers” & “Double Ending” Brokers Targeted

“People need to ask themselves very carefully, ‘Why am I buying this house?”’: Stephen Poloz, Bank of Canada.

The government of the Province of Ontario announced a laundry list of measures to prick the crazy house price bubble in Toronto and surrounding areas. This includes a 15% transfer tax imposed on home sales to non-resident foreign investors, including corporations. It’s aimed at Chinese investors in China that buy homes in Canada to diversify their assets and get them out of harm’s way in their own country.

For them, homes in Toronto (or anywhere outside China) are an asset class denominated in a foreign currency. But these homes also confer other benefits in the event some untoward mishaps occur in China, as these investors appear to half-expect.

The Province of British Columbia imposed a similar measure last August to get a grip on the housing bubble in Vancouver that had long ago spiraled out of control. It had the effect of freezing the market, with home sales volume plunging.

Why now in Toronto? It appears that the attention of Chinese investors has pivoted from Vancouver to Toronto: In March, year-over year, the average price for all types of homes in Toronto soared 33%! It doesn’t take a genius to figure out that this is simply ludicrous.

Canadians have been warned, though perhaps investors in China haven’t gotten the memo yet.

At a press conference on April 12, Bank of Canada Governor Stephen Poloz warned about this ludicrous house price inflation that “has divorced itself from any fundamentals that we can identify.” Prices are in “an unsustainable zone.”

“It’s time we remind folks that prices of houses can go down as well as up. People need to ask themselves very carefully, ‘Why am I buying this house?”’

The industry has been feverishly gushing hype that fundamentals explain why this ludicrous price inflation shouldn’t be considered ludicrous. But Poloz would have none of it:

“There’s no fundamental story that we could tell to justify that kind of inflation rate in housing prices….

Instead, he blamed a “growing role for speculation.”

“For folks who are in the housing market it’s a question of risk management, what would you do if there was a correction? When something has been rising that quickly, of course it’s vulnerable to a correction.”

So get ready for that “correction” – that was his message.

The Ontario government’s “Fair Housing Plan” lists 16 measures, including:

A 15% “Non-Resident Speculation Tax” that applies to individuals who are not citizens or permanent residents of Canada and to foreign corporations buying residential properties of one to six units in the Greater Toronto and Hamilton area plus surrounding regions (the “Greater Golden Horseshoe”). I circled Toronto:

But the transfer tax will not apply to refugees and “nominees” under Ontario’s Immigrant Nominee Program. Further, the government might issue a rebate once the foreign investor obtains permanent resident status or citizenship.

A “vacant homes property tax” of unspecified magnitude in the City of Toronto “and potentially other interested municipalities” to “encourage” owners to either sell unoccupied units or rent them out. This would “address concerns” that homes are “being left vacant by speculators.”

Flexibility to use “property tax tools to help unlock development opportunities,” such as a higher tax on vacant land that has been approved for new housing.

A number of measures for in the rental market, including expansion of existing rent control in Ontario to buildings constructed after 1991 (rent control was limited to buildings built before 1991). It caps rent increases at 2.5% per year. Exceptions apply.

Measures to increase the “affordable housing supply,” such as using “surplus provincial land assets” to develop a mix of market housing and “affordable” housing. Plus, among other goodies, “a targeted $125-million, five-year program” to boost the construction of rental apartment buildings “by rebating a portion of development charges.” Affordable means subsidized. Developers love this language. They’re going to make a killing.

Review “double ending” by brokers “to ensure that consumers are fairly represented in real estate transactions.” Double ending is where one agent represents both the seller and a bidder, thus working both ends of a deal. This has been fingered as a practice that triggers bidding wars and drives up prices. The practice is banned in most provinces but not in Ontario.

A ban on “paper flipping” and similar practices that contribute to “excessive speculation.” Some of it targets flipping homes in the preconstruction market, such as “entering into a contractual agreement to buy a residential unit and assigning it to another person prior to closing.” This measure is targeted at condo speculators who place deposits on multiple units during the construction phase. Just before the building is complete, they sell the title (“assignment flipping”) for a big profit.

A few days ago, Ontario Minister of Finance Charles Sousa called speculators who engage in preconstruction paper-flipping “property scalpers.”

Vancouver’s measures were not nearly as comprehensive. Yet the market froze as non-resident Chinese investors headed to Toronto, Seattle, and elsewhere to buy into the global asset class that North American homes have become.

So where will these stiffed Chinese investors head now? The US? Brokerage firms have long been selling US homes to investors in China. Housing Bubble 2 beckons. But now it has been taken to an altogether new level: the second largest US brokerage firm with 30,000 agents in the US is listing all its US homes in China. Who’s behind it? Read… Warren Buffett’s Berkshire Hathaway Starts to Market US Homes in China

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  89 comments for “Toronto House Price Bubble Hit with 15% Foreign Buyers Tax. “Property Scalpers” & “Double Ending” Brokers Targeted

  1. Leeburt says:

    Record high housing inventory, record low demand, rental rates half the cost of buying, asking prices 300% higher than long term trend and double construction cost and now falling prices.

    Do you really believe the input cost to build a house is greater than $50 per square foot?

    • Vladn says:

      Yes it is closer to 150-200 USD so adjust for cnd . A condo might be 80-100 but that doesn’t include fees permits and architectural and engineering only build out

      • GLinc says:

        Lol. We’ve never invoiced a client for “architectural and engineering only build out” but it’s another good one from you.

        And other than a$500 permit, there are no other fees. And no it’s not “closer to” some inflated number you paid. $50/sqft is what it is.

        You paid too much. Take your losses and get on with your life.

      • COAColorado says:

        If you have to charge $150-200/sqft to earn a profit, you’re in the wrong business….. I don’t care what you’re building. Common wall two story multi family structures aren’t anywhere near $80 per sq. Try $40.

  2. Thor's Hammer says:

    So where will these stiffed Chinese investors head now?

    Seattle. And what is the probability that the US will adopt measures similar to the Canadians? Zero.

    I personally advocate a use-it-or-loose it policy for home ownership. If the registered owner fails to occupy his home or rent it out for at least 50% of the year, his annual property tax rate should rise to 30%. Sure would do wonders for freeing up the housing supply shortage in places like Jackson Hole and Aspen—-.

    • Lee says:

      They should come to Australia we want them, we need them…………we like their money!!

      What is the deal with housing? It is an asset just like any other asset class. Another government ‘solution’ to a problem they probably created in the first place.

      Buying a house or becoming a homeowner is not a right.

      Only 33% price growth in a year. A bunch of pikers.

      Here is a list of best performing suburbs around the greater Melbourne area over the past year:

      Suburb House Median Price % Increase

      Brunswick East $1,183,000 41.7%
      Highett $1,208,750 36.1%
      Brunswick West $988,000 32.6%
      St Kilda $1,315,000 31.5%
      South Yarra $1,795,000 31.2%
      West Footscray $885,000 29.2%
      Thomastown $570,000 28.8%
      Essendon $1,240,000 28.6%
      Blackburn South $1,184,000 28.0%
      Seaford $645,000 27.7%

      Most are near the CBD, Seaford is 36 kilometers from the CBD and about an hour train ride (when the line actually runs!!) from the city.

      Those huge increases and prices near the CBD distort the price stats. The median for Melbourne may now be over A$800,000, but not out in the sticks.

      And why would you want to live in Toronto anyway? Snow and below zero temps!!!

      • azdude says:

        And that right there explains why demand is collapsing.

      • Mike G says:

        Just insane. A lot of these Melbourne suburbs were inexpensive working-class areas without much charm when I was a student three decades ago. I looked up the tiny Brunswick terrace house my student friends rented — it was valued under $100k then, over $800k now.

      • Slyynnns says:

        Get your head out of your…

        You are wrong. Housing is NOT an asset class like any other because shelter is a necessity for human life. I don’t know about you, but I’m here existing for the humans, not for worshiping an asset class. A collective of humans be it city or country has a right to create its own laws in order to protect its community health and happiness (including local business and jobs). Unaffordable housing squashes spending and dampens economic activity (except for the few opportunistic “investors” who skim off of everyone else through housing speculation).

        One trouble with US cities is that they pander to the rich and existing house owners who don’t want to risk losing any upside to their property investments. We have a near love affair with property and irrational loathing of taxes but they can be effective levers to evening out the playing field. Especially in a situation where the global rich are using a local asset for their hedging. There are too many global rich and not enough Vancouver properties to satiate their rising obsession with property. Laws must be enacted to protect SHELTER for locals who need to live and work in said city.

        • Dan Romig says:

          I am one who, generally speaking, has a ‘loathing of taxes’. For instance: if I invest in making my home to be more livable by renovating and or expanding, and I take out construction permits, my home will be reassessed and revalued. Then, my property taxes will increase year after year after year.

          So what do I get for increasing my quality of life by improving my home? Answer: Financial punishment for as long as I reside in said home. Yes, the investment(s) may be recouped when I sell my home.

          But the cost of my city, county and state services that are paid for by property taxes remain the same whether or not I have remodeled or invested. So, “Laws must be enacted to protect SHELTER for locals …” can be interpreted as (in my perspective anyway): “Laws have been enacted to provide financial incentive to keep me from investing in my home.”

        • Wolf Richter says:

          I thought he was being sarcastic.

        • Dan Romig says:

          Wolf, perhaps he was being sarcastic???

          My ‘Modified Libertarianism’ perspective makes me question why property taxes aren’t simply based on lot size.

          Auto tab fees in Minnesota are also set to punish those with newer more expensive cars, and this too seems unjust to me. After paying the state its 6.875% sales tax on all vehicle purchases, tab fees should be based on vehicle weight, not age and value IMO. I have a financial incentive to keep my 22 year old car on the road, and to refrain from buying a new(er) car. The two pieces of plastic needed to be put on license plates every year cost the same to be made, but charging more for one car over another is simply punishment for success and affluence.

          I hope that’s not too political for your comment section, but it is a cost of life in my state; for those who own vehicles anyway.

        • c smith says:

          “One trouble with US cities is that they pander to the rich and existing house owners…” Um, yea. That’s because there’s a direct relationship between property values and local property tax revenues. Government flunkies may not be the brightest, but they can figure this one out.

        • Lee says:

          Gee thanks for that nice comment:

          “Get your head………….”

          Home ownership is not a right.

          Home ownership in Toronto, Toorak, Hollywood, or Monaco is not a right.

          You can rent, buy in another city or live with family, friends or even share.

      • MC says:

        There’s plenty where that came from.

        Between 2005 and 2016 the US and Australia topped all charts as destinations for Chinese investors: the US was at the receiving end of a US $109 billion bonanza but Australia got US $93 billion. Nothing to complain about, especially considering the third beneficiary (Brazil) got a measly US $51 billion.

        I haven’t got the data for Australia, but the breakdown for the US is absolutely impressive: of those $109 billion $40 billion, well over a third went straight into “real estate”. By contrast Silicon Valley (“technology”), the second sector, got a miserable $12 billion.

        If Australia has the same ratio of real estate investments to everything else, it means Chinese “investors” have pumped well over US $33 billion into the Australian real estate market between 2005 and 2016. As the Australian RE market is a fraction of the US one and as Chinese investors have mostly given commodity-dependant Western Australia a wide berth, it helps explain the double digit yearly price increases throughout most Victoria/NSW/etc markets.

        • Market Knowledge says:

          These are hardly “investors”. They’re gamblers using borrowed money.

          Who cares what the price is when you’re using someone elses money? (borrowed in this case)

        • MC says:

          I hope the older and more experience Asia hands who frequent this comment section will chime in. In the meantime…

          Why does a Chinese enterpreneur who made his fortune, say, manufacturing toys and who has never left the Motherland buy a house in Toronto or New York?
          First reason is social pressures: everybody’s doing it, from his friends and neighbors down to the local head of the Communist Party. While he could quote at length Confucius, Mao and many other local thinkers about the benefits of living modestly, resisting those pressures is extremely hard, especially if one hopes to enter the more rarefied strata of local society.
          Second reason is these people truly believed the ads: they think they have done an investment and that housing prices in Toronto, Sydney and Seattle will never go down. This myth is starting to lose some of its luster, not so much on account of Vancouver (the shockwaves are still to hit Chinese shores) but of London, where the Belgravia/Mayfair/Chelsea ultra-prime market is not doing so well and where valuations are so nosebleeding high even a single digit drop in value means losing a lot of money.
          Third is the same reason goldbugs buy gold regardless of price and survivalists buy ammo by the truckload: there’s a widespread belief these houses will be a fallout shelter in case “something bad” happens in China. Of course this assumes one somehow manages to get out of China before that “something bad” gets worse…

        • TJ Martin says:

          ” These are hardly “investors”. They’re gamblers using borrowed money ”

          Actually if you’d look at the facts they are not ‘ gamblers ‘ using someone else’s money . What they are is wealthy Chinese who have little faith in their own economy shifting as much of their wealth into overseas ‘ investments ‘ in order to shelter their riches from what they at least perceive as the oncoming storm in the Chinese economy .

          Now don’t misunderstand me .. I hate what their actions are doing to the housing markets they’re involved in . But lets at least be accurate and factual as to why they’re doing it .

        • Your Good Friend says:

          “Actually if you’d look at the facts they are not ‘ gamblers ‘ using someone else’s money .”

          The problem is, that’s not the truth. The truth remains these people are borrowing unprecedented amounts of money from Canadian and US banks with no intention of paying it back.

      • Willy2 says:

        – But the state of Victoria (in which Melbourne is located) has seen an increase of about 1 million people since say the year 2000. No wonder house prices have gone through the roof.
        – But the flip side is that at the same time infrastructure hasn’t been expanded (too much) and now traffic in Melbourne has become a nightmare.

      • Cyrus says:

        Guys, what Lee doesn’t disclose is the fact that he is a real estate agent. As I have said before, I don’t have time or interest to research Australian market, but I bet if you do your research, you will find his figures are bogus. He used to pretend to be just an innocent, gullible home owner; now he has dropped that pretense, but still keeps posting figures which are quite probably bogus. Beware of sneaky real estate agents; they have become replaced the used car salesman as the top dog scums.

        • Wolf Richter says:

          You don’t have time to do research but you call the numbers that someone else offers bogus? For what reason? Because he works in the industry?

          There are a lot of industry insiders who read this site, and some of them comment, from truckers, and railroad insiders to, yes, real estate agents. Their comments are welcome! They can actually contribute some facts.

          I’ve reported on median price gains in Sydney and Melbourne areas. And guess what – they jumped overall. So yes, there would be some areas where they jumped a lot more, and other areas where they didn’t. That’s how the median price is established.

        • Cyrus says:

          Wolf: I don’t have problem with insiders as long as they disclose they are and let readers decide for themselves. The fact is that Lee used to pretend to be some gullible home owner who didn’t have good English, and could hardly tell his right hand from his left hand. Now, we can see that his English is as good as any, and understands all the figures. I’m just warning readers to do their due research rather than comment/make decision with figures which are uncertain. I know some Australian real estate markets have gone up, but I doubt as high as the figures that he has posted.

          If he didn’t have a history of misleading, I would not have been so direct.

        • Wolf Richter says:

          Where did you get the impression that Lee “didn’t have good English, and could hardly tell his right hand from his left hand?”

          Lee has been posting here and at my predecessor site for many years. He has said many times that he’s an American. He lived in Japan for many years. And he has been living in Australia for many years. That’s from the many comments he made. I don’t remember all the details … but I vaguely remember something about being from the Northeast.

          He has also been a fervent defender of the housing bubble in Australia from the first article I published on it. That’s his shtick. And that’s OK. Just remember, when housing markets falter, real estate agents leave the business in droves … because they no longer can make a living. I’ve seen this a number of times. Real estate agents need to make hay while the sun shines.

          If you call someone’s figures “bogus,” you need to do some research first and prove it. Or else you just shot your credibility. If you can find good numbers from a reliable source, I’d love to see them.

          However, it’s OK to “doubt” someone’s numbers and ask for a source. Happens all the time. So the thing to do with Lee would have been to doubt his numbers and ask for a source.

      • kam says:

        A country’s housing should be for a country’s citizens. If a median income can’t buy a median home then foreign buyers pricing out domestic buyers should be ended.

        Homes are indeed a right. A right to be honestly bid on by locals to house their children.

      • Shawn says:

        Good point, Toronto sucks, it’s become like LA.

      • Maximus Minimus says:

        That must be because Melbourne is close to Antarctica with lots of unrecognized potential.

    • Thor's Hammer says:

      I notice that nobody read my suggestion for a use-it-or-loose-it property tax policy. Is that because it is “different” and not PC, so just best ignored?

      Unlike attempts to slowly release the gas in the bubble by targeting outsiders, it actually gets to the heart of the problem— housing used as a speculative asset and vehicle for money laundering rather than as a place of shelter for families.

      If unused housing is taxed at confiscatory rates landowners are left with but two options: Live in the one house they own, or find a renter (at any price) for their unused properties. A win-win situation for bringing property prices and rental rates into the realm of affordability.

      Never going to happen since flipper madness has invaded the American, Canadian, and Australian mind and infected all the brain cells.

      • Wolf Richter says:

        “…that nobody read my suggestion for a…”

        Don’t worry. Plenty of people read it. Just no one replied. That’s all.

        • chwee says:

          The Swiss have just such a policy in place. If a place is not lived in for at least 180 days out of the year, there is a punitive 20% tax on the sales price levied. Hence foreign ‘investors’ who have bought up places, whether it’s in the major towns or ski resorts, have to hire a professional realtor company to help rent out their properties. That has resulted in a win-win for the swiss citizen – prices may go up, but the actual housing stock supply doesn’t drop for the folks who actually live in the country per se.

      • Gwynnyth says:

        No reply? Maybe because no one thinks the governments anywhere WOULD DO IT???

  3. Willy2 says:

    – Already in 2015 there were the first signs that the Vancouver real estate market was cooling off. Because first time home/condo buyers no longer could afford those rising prices.
    – The chinese government imposed capital controls in april 2016 and as a result the Vancouver real estate market was cooling even more. But in only in june 2016 the “foreign buyers tax” was implemented. In ohter words the real estate market in Vacouver was already cooling down BEFORE that tax was implemented.

    – Mr. Ross Kay has said that – based on his proprietary models – the real estate market in “Greater Toronto” was already “loosing steam” but that wasn’t obvious/clear (yet) for the canadian Joe Sixpack.

    – China imposed capital controls in april 2016. So, how can chinese money be responsible for those (still) rising prices in Toronto after 2016 ?

    • subunit says:

      “– China imposed capital controls in april 2016. So, how can chinese money be responsible for those (still) rising prices in Toronto after 2016 ?”

      Money laundering exists, friend. Look up “smurfing”.

      • Willy2 says:

        – Yes & no. There’re – without a shadow of doubt – more ways to get money out of China. But these capital controls have reduced money outflows already significantly.
        – But is chinese money responsible for price increases throughout the entire the “Greater Toronto Area” (GTA) and the “Golden Horseshoe” ? I highly doubt it. So, what canadians do & decide is not important ?
        – The GTA & the “Golden Horseshoe” combined is much larger than the Vancouver Area and that’s why it will take more time to reverse real estate trends but if/when the trend reverses then the damage will be much larger. In the Golden Horseshoe live some 25% of the canadian population.
        – Mr. Ross Kay looks at his model (includes among others mortgage debt) and thinks that the GTA will see slowing sales in the next months (already next month ??).

        • Gee says:

          You dont appear to understand the impact of speculative money. Yes, the Toronto market is made up of both domestic and foreign buyers, but just as it was here in the US in housing bubble 1.0, speculative $ has an impact on non-speculative. When people feel like they are losing the chance to ever have a home, they become desparate, and will lose all sense of what a rational price to income ratio might be for a house. In a normal market, with non-corrupt financial institutions, and banks that had to hold the loans they made, these buyers would not be given credit.

          But that is not the world we live in. Mortgage lending standards to Canadians appear to be non-existent. So if foreign demand cares little about what price they pay because they assume even if unrented, they get massive capital gains because they know many of their country(wo)men are in on the speculation as well, well, then they will just keep paying higher prices without respect to any fundamental.

          And speculative money is not a fundamental, by the way. The issue with detached valuation is when the money reverses course and heads somewhere else. Late speculators will take a loss, but much of the early speculative money can get out and go to the next bubble market. There seems to be no shortage of them globally, since you cant even get one country to get its situation under control, and countries like Canada are like multiple countries, in that they arent aligned with policy. Most macro prudential housing policy today has been an utter failure, however, with respect to reining in speculative $ based price gains for housing.

  4. Nicko2 says:

    I like the human interest story the other day in the G&M of a couple who bought a house for $250K ten years ago and sold for nearly 800K, then moved to Ottawa. Happy endings.

  5. 2banana says:

    The 15% tax in Vancouver really didn’t do much to bring sanity to their housing market….


    ‘Just when prospective homebuyers thought they might find some relief in Metro Vancouver’s real estate market, a new report suggests that while the foreign home buyer tax may have cooled the housing market temporarily, people are now starting to rush back in.’

    ‘Royal LePage CEO Phil Soper says sales plunged and price increases slowed in a housing correction that began seven months ago — around the time B.C. introduced a 15 per cent tax on foreign buyers.’

    “Vancouver house prices are up compared to the first quarter of 2016, yet this doesn’t tell the complete story,” Soper said. “For weeks now, we have witnessed a steady fall in real estate values in the Lower Mainland, with sales activity down some 40 per cent compared to recent norms.”

    ‘But he said in the past month, sales in the Vancouver area have jumped by close to 50 per cent on a month-over-month basis — better than the seasonal average. “Someone [cried] ‘wolf’ and there really [aren’t] that many Chinese buyers here after all,” Soper said. “It’s about five per cent of the overall market so now they are going to rush back in.”

    ‘Local Royal LePage realtor Adil Dinani said he is seeing signs of a market rebound. “In the city of Vancouver, four to five out of 10 properties that I have been involved with on the listing side have gone into a multiple-offer situation, so we are seeing that become commonplace again.”

    • Willy2 says:

      – Yep, this is the kind of stories that “organized real estate” is pumping out. (compare: “organized crime”),

    • Wolf Richter says:

      OK, to bring some reality to this: Residential property sales in the Vancouver region in March plunged 31% year-over-year to 3,579 units!

      Per Real Estate Board of Greater Vancouver. Granted that plunge isn’t quite as steep as the 40%+ YOY plunges we saw late last year.

      When volume plunges 31% YOY, it’s not a sign that there is a lot of strength in this market. The market is confused. Potential sellers don’t know how to read it. Many have pulled their units off the market, while waiting for clarity. Everyone is trying to figure out how this will wash out.

      • azdude says:

        And prices collapsed 20% in a month.

        Keep in mind prices in Vancouver were already falling before the 15% levy was imposed.

      • Willy2 says:

        – Right. Falling sales volume(s) is the first visible sign the market is cooling down (in this case in Vancouver). But “organized real estate” tries to hide the ugly truth.
        – But is spite of that prices can still go up (for a while). Because of the sales mix changes in favour of higher priced RE.

    • Maximus Minimus says:

      The 15% tax was never meant to bring sanity to the market. As I said, it was an pre-election ploy, which hopefully will not work.

      • CV5 says:

        The Right Honorable Lords are under no obligation to do anything but shear the sheeples. I mean that
        is their reason for existence for pity’s sake. What did you expect? Poloz is in the bubble business.
        All of the CB’s are. Wealth transference is the only game in town at this point. And since it can’t last forever its pedal to the metal time.

    • intosh says:

      “Someone [cried] ‘wolf’ and there really [aren’t] that many Chinese buyers here after all,” Soper said. “It’s about five per cent of the overall market so now they are going to rush back in.”

      Duh. Of course, he would say that. Why would he bite the hand that feeds him?

      Toronto RE’s astronomical price surge that coincides with Vancouver’s fall was due to Vancouverites migrating to Toronto, right Mr Soper?

    • Alex says:

      Is it four or five? I guess when you are publishing Bulls hit facts it doesn’t matter right?

      This market is a joke. At least ontario is going to ban the assignment of preconstruction units. That’s why vancouver is rebounding, the money is moving to the condo market where rampant speculation is driving preconstruction pricing and consequently boosting resale.

      30% foreign buyer tax plus 55% tax on any earning by foreign buyers (no capital gains bs) and prices will drop.

  6. james wordsworth says:

    This will help a little … but it is still not enough.
    1. Cut back on immigration until housing supply is brought into balance with demand. (Canada takes in almost 1,000 people a day with most going to Toronto and Vancouver.)
    2. Mandatory 20% down payment ( verified).
    3. Up the land transfer tax to discourage flipping.

    • Alex says:

      They should up the land transfer tax on investment properties so as not to hurt regular people.

  7. Tom Stone says:

    Wolf, “Double ending a deal” is a very risky thing for an agent or Broker to do, if one party ends up unhappy the litigation can get very expensive.
    And it should be distinguished from “Dual Agency” which can arise when two different agents or broker associates who work under the same managing Broker are on either side of the deal. As an example David at Coldwell Banker Petaluma represents a buyer for a home listed by Daphne of Coldwell Banker Petaluma…you have a dual agency because they both work for the same managing Broker.
    It can get messy as the Horike case shows

  8. mynamett says:

    Canadian dollars compare to the US dollars is losing steam and seems ready to go lower and lower. Carney might have to raise to interest rate to defend the CAD and attract outside US money need to finance Justin Trudeau expensive budjet.

    Carney does not want to be blamed for the collapse of the residential bubble when he raises rate. He has been sending a lot of warning recently about Canadian housing bubble and the possibility of raising. These warnings to Canadians should be taken seriously. Won’t be long before Canada raised it is interest rate.

  9. Gretzky says:

    Guys……Losing has 1 ‘o’ not 2. The extra ‘o’ changes the word to loose ( like ‘loose change in someone’s pocket’). I wouldn’t normally say anything, but 12 comments in and two different posters misspelled the word.

    • Wolf Richter says:

      I quickly loose patience with the typo-police in the comment section ;-)

      • Gretzky says:

        Wolf, you gotta cut me some slack. I’m a librarian. :)

        • Paulo says:

          I thought you played Hockey? :-)

          Canada will need to steel itself against Trump attacks. This week he highlighted dairy marketing boards, in particular Quebec and Ontario, and today softwood lumber was in the crosshairs.

          The last time the US played with softwood tariffs I suggested my sister from WA not visit us for awhile, (BC), or at least be very careful where she parked her car when away from our property. I live in logging country and people take survival pretty seriously around here.

          It looks like an ugly year is starting to unfold north of 49. The housing issue is just money laundering and greed coming home to roost. It was never going to be sustainable. When you affect workers pay cheques playing politics, it’s a whole different game.

      • Julian says:

        Except “loosing” instead of “losing” is not a typo – it’s a mistake.

        A typo is an inadvertent letter typed – but adding an extra “o” clearly indicates the desire to type an excess of keys than is required – hence, not an inadvertent “typo”, but rather a spelling mistake.

        Just like typing “there” instead of “their” or vice-versa, is not a typo.

        • Wolf Richter says:

          People who write a lot, realize how the brain, the eyes, and the fingers are connected, and that this connection is very unreliable. For example, you’ve known for decades, it’s supposed to be “they’re,” and you’ve used it correctly millions of times and incorrectly a few times too. Why? You think you type “they’re,” but your fingers type “their” and your eyes see what the brain WANTS to see, which is “they’re.” Hence your typo.

          I don’t know how many times I’ve typed, infamously, “brick-and-mortal” and I still do. I don’t even see it… the way I find it is by searching the file for “mortal” and the computer finds it for me if it’s there.

          The brain is very unreliable. It sees via the eyes what it wants to see, not what is there.

        • English says:

          Alexande Pope’s ‘Essay on Criticism’ addressed these matters hundreds of years ago. A must read for Bloggers.

          “In every Work regard the Writer’s End,
          Since none can compass more than they Intend;
          And if the Means be just, the Conduct true,
          Applause, in spite of trivial Faults, is due.”

      • Mel says:

        For heaven’s ‘sake, guy’s. ‘Show little con’sideration here. Not everybody’s perfect.

        • TJ Martin says:

          … not to mention there’s no ‘ edit ‘ function when you realize you’ve made an error only after you’ve posted .

          To be clear I’m not complainin … jes saying … [ errors intentional]

      • Mary says:

        There are occasional typos, but then there are comments with so many misspellings that they become incomprehensible. Is the problem ordinary-size human fingers trying to type on a tiny iPhone? Whenever I type a long text or email on my phone, it looks like I have brain freeze.

        • Wolf Richter says:

          I totally get that. I have an SE (small to fit into my pocket). When I type on it, I massacre entire words. Autocorrect then puts them back together however it sees fit. With sometimes hilarious results.

        • Cyrus says:

          I always wonder how people enter long messages on their phone. I’m an extremely fast typist, but I have to have a big, dumb keyboard, with the right key touch to type. If I try to type long messages on my phone, I will turn into a senior citizen before I’m done with the first line.

    • Flying Monkey says:

      …your spot on with you’re correction… ;)

    • robt says:

      Otherwise known as the inability to see the forest for the trees … I see many comments like this, and it just seems like the commenter focuses only on the spelling and never makes observations about the content.
      BTW, there are numerous studies that demonstrate that evtn iv yon spill evri wrrd wrnng piopll cnn stll rddd it bcaase thyy ddnt jsst reed evirr wrrd.
      As long as they have normal high level comprehension, anyway.

    • Gwynnyth says:

      Could it be that nasty auto correct?

  10. Gretzky says:


    I’d love to see our housing market get back to normal first – nothing has really changed. A blip of a slow-down in sales, but now I read that things are picking up.

    P.S. I only play hockey on the weekends now. :)

  11. Flying Monkey says:

    “There’s a fundamental story that we could tell to justify that kind of inflation rate in housing prices and the reason is uncontrolled emissions of paper money and paper credits from the central banks”

  12. Kreditanstalt says:

    Meddling in the marketplace. Decisions around buying and selling of anything should be solely the business of the two parties involved.

    If governments were SERIOUS, they’d end deficit spending, stop borrowing via bond issuance, cut their budgets and QUIT MANIPULATING INTEREST RATES.

    THAT might reduce prices…

  13. I am a Realtor and an Investor. Me and thousands of other people like me buy distressed homes. Homes become distressed for a variety od reasons and investors buy, fix and sell for a profit. Home buying companies and Realtors often flip paper contracts if they find a bargain house and do not have either the time, capital or other varied reasons and sell the paper contracts to another company who can fix and sell the property.
    If this law moves to the United States it will cause homes to either not sell or maybe go into foreclosure. It will not be good for the Real Estate market.

    • Justme says:

      >>It will not be good for the Real Estate market.

      It will not be good for Eugene E. Hoffman of It will probably be good for people who need a roof over their head. There is a big difference in value between these two measures of goodness.

    • Mongoose says:

      Remember my good friend. Nothing accelerates the economy like falling prices to dramatically lower and more affordable levels. Nothing.

  14. Maximus Minimus says:

    What was that quote about watching elected (and unelected) representatives of the people and admiring ones dog?

  15. Shawn says:

    15 % property take won’t happen, Ontario’s government is way too corrupt and way too desperate for that. And even if it happens, it’s just a bandaid. Pretty soon the uber wealthy Chinese thronging to escape a collapsing economy will come to the conclusion that a 15% hit may not be so bad. What is really needed to prick this bubble, among many, is good old fashion inflation and interest rate hikes.

    • History says:

      What’s a fair price of a house when your money comes from corruption? The answer is really the amount of money you can get from the corruption activity itself i.e. there’s no house too expensive. Ain’t your money anyways.

  16. Jeremy says:

    There’s a house on my street that’s been up for sale for a week, and it hasn’t sold yet. Until the past month, they’ve typically sold the same day they’re listed. I think the bubble is already deflating.

  17. Willy2 says:

    – One of the reasons the canadian real estate is so overvalued is that after 2008 the canadian government relaxed the conditions under which people could take out a mortgage. E.g. the amount of money a person had to put down up front went down.
    – And – of course – interest rates kept going lower after 2008.

  18. Striebs says:

    Nobody above nor the authorities have identified the one tax change measure which would really help .

    A properly set Location Value Tax , a.k.a. Land Value Tax (LVT) .

    Derives straight from Adam Smiths “Annual Ground Rents” as proposed in the 1760’s for funding public services and amenities .

    Even neoliberal apologist Milton Friedman called LVT the “least worst tax” .

    The tax is levied on the economic rentable value of the location which is a function of geography , nature and communal expenditure (rather than expenditure by the freehold owner) on infrastructure like rail , roads , stations , local schools etc .

    Man did not make those locations , God did , so why should the economic rent not be captured for the benefit of all society rather than privatised for the benefit of the few (landlords , owner-occupiers, mortgage lenders) ?

    Failure to tax land properly just means that treadmill taxes have to be raised to ridiculous levels .

  19. Gershon says:

    Absentee foreign “investors” are going to be low-hanging fruit for the tax man once the bubbles start to burst. It will be politically popular to stick it to well-heeled speculators holding foreign passports.

    • BBarker says:

      Unfortunately, Gershon, I think you are way wrong on this.

      Foreign investors will flee back to their home country and stick the Canadian banks with the loss.

  20. Willy2 says:

    – The Bank of Canada is now getting concerned regarding the RE bubble in the Greater Toronto Area but there wasn’t a peep about the RE bubble in Vancouver.

  21. Willy2 says:

    – Listened to one (not the latest one) podcast with Mr. Ross Kay. And he says that in the GTA the sales mix is also changing while the prices are still rising. That means that first time home/condo buyers are dropping out of the market. It’s the first sign of a cooling down of the housing market in the GTA.

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