Quote:
Originally Posted by spuzzum
Government should absolutely not be involved in the free market. The foreign buyers tax in Vancouver killed the market instantly. While prices didn't retract, it killed investment.
For all the whiners that talk about affordability, move where you can afford to live and create your own market.
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Foreign taxes are regulations between separate markets, not within one competitive market. Free markets generally don't really work across countries. China has an entirely different set of laws and regulations, particularly as they pertain to labour and the environment. Pooled Chinese investors buying Canadian real estate is anything but free market. In fact, it constrains the local market by making real estate, store fronts, capital, etc...artificially more expensive. It prevents new people from entering the market. Real estate also isn't a typical good, that you can just produce more of or relocate to satisfy demand.
I'd be all for outlawing any kind of foreign investment in Canadian real estate. This would have a much more positive affect on the free market, as real estate prices, which the rest of the economy depends on, would be in step with the rest of the economy, as opposed to a massive barrier to entry.
However, what the government is obviously trying to do is deflate the balloon, without a giant pop. Good luck with that.