[URBAN NOTE] "Ontario will need to implement foreign buyer tax on housing, CIBC says"

[rfmcdonald]

Well, yes. This CBC News report is unsurprising.

A prominent economist says that Ontario will have little choice but to implement a tax on foreign house buyers, similar to the 15 per cent surcharge recently slapped on home purchases in Vancouver.

In a recent note to clients, Benjamin Tal of CIBC says the biggest problem facing policymakers with regard to hot housing markets in Toronto and Vancouver is a limit on the supply of new homes.

In both cities, there's a lack of undeveloped land to build new real estate in the downtown core.

"The main reason behind higher prices in the [Greater Toronto Area] is a policy-driven lack of land supply," Tal said. "And with no change on that front, policymakers have to use demand tools to deal with what is essentially a supply problem."