Foreign Buyer Be Gone

Steve Saretsky -

I don’t have any strong political views, I genuinely believe politicians are just pawns in a bigger system that is deeply entrenched in society today. In other words, full of promises but not a whole lot changes regardless of who gets in power. I do, however, have a few observations about these elections that i’d like to share.

First of all, the election this September shouldn’t even be happening. The Trudeau government clearly misread the sentiment emanating across society. Inflation is at a 10 year high, housing affordability is at a 30 year low. We’re just pulling ourselves out of a recession with a million Canadians still out of a job. People are tired and frustrated from a pandemic with seemingly no end in sight. Drug and alcohol usage is through the roof. It’s quite likely that the mental health crisis that’s been created will be an even bigger problem than Covid. Suffice to say people are pissed off and looking for change of any sorts. It’s quite possible that not only will Trudeau fail to gain a majority, but he could lose to the Conservatives. At least that’s what the polls are saying. Again, don’t shoot the messenger.

Anyways, this has prompted the Trudeau Government to pivot. In case you missed it they have now revamped their housing platform. The Liberals are willing to match the Conservatives with a 2 year ban on foreign purchasers. Ironically, Trudeau and the Liberals voted against a similar Conservative motion that was presented in the House of Commons back in June.

In other words, in a fight for power, all three major political parties now have anti foreign buyer policies. I don’t care what you think about these policies I am merely making an observation here. Clearly these policies are politically popular across the left and the right. Remember just a few years ago these types of policies were considered racists and xenophobic. But, hey, there’s an election to win here.

Housing is front and centre in these elections, as it should be. While Canada has a national home ownership rate of 69%, for the first time in recent history, young voters, who have largely been shutout of the property market, will outnumber boomers. Furthermore, In BC & Ontario, the majority of voters in this election are in fact renters, not homeowners. In BC, an estimated 63% of eligible voters did not reside in owner-occupied housing according to data compiled by Stats Canada & Better Dwelling.

Homeowner or not, real estate makes up 13% of GDP and that doesn’t include all the spin-off activity such as furnishing a home or using new found equity to spur additional consumer spending. Regardless of your political views, a nation built on real estate means any housing policy changes will impact all of us. Enjoy the show.

Three Things I’m Watching:

1. Real Estate makes up just over 13% of GDP in Canada. (Source: Richard Dias)

2. An estimated 63% of eligible voters in BC did not reside in owner-occupied housing. (Source: Better Dwellign)

3. Polls suggest liberal and conservatives are tied in election battle. (Source: Bloomberg)

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The Saretsky Report. December 2022