Foreign buyer home purchases are declining in a region of Ontario covered by a non-resident tax, according to provincial government figures released Wednesday.
People who aren’t citizens or permanent residents, as well as foreign corporations, accounted for 1.9% of the transactions in the Greater Golden Horseshoe Region — which includes Toronto — from Aug. 19 to Nov. 17.
That is down from 3.2% from the previous three months. It is also not much higher than 1.6% outside the Greater Golden Horseshoe Region, which is not covered by the tax.
In Toronto, 3.8% of transactions were made by foreign buyers in the same August to November period, which is lower than the 5.6% in the previous three months.
The 15% tax was imposed in the Greater Golden Horseshoe area — stretching from the Niagara Region to Peterborough — on buyers who are not citizens, permanent residents or Canadian corporations. In the first month after the tax was imposed in late April, foreign buyers made up 4.7% of home sales in the region.
It was imposed at a time that the housing market in the Toronto area and beyond saw year-over-year price increases of more than 30%.
The average selling price in the Greater Toronto Area decreased by 2% cent last month compared to November 2016, due in large part to a smaller share of detached home sales versus last year.
Finance Minister Charles Sousa said Ontario’s housing plan — which included the foreign buyer tax as well as other measures to cool the market and expanded rent controls — is having the desired effect.
“Average home resale prices have moderated when compared to the extreme year over year price increases experienced earlier this year,” he said in a statement. “The housing supply has grown steadily and people now have more affordable alternatives. Ontario continues to welcome new residents who contribute to its strong economic growth.”
The province has so far collected about $133 million from the tax, though that includes transactions that could be subject to rebates, such as people who subsequently get citizenship or permanent resident status, as well as foreign nationals working in Ontario and international students.
Nearly two-thirds of that money was collected from transactions in Toronto.
Canada Mortgage and Housing Corp. and Statistics Canada released data Tuesday showing that foreign buyers make up a minuscule portion of the overall housing market in the country, but what they own is more expensive and newer than the average Canadian homeowner.