(Source: Metro News)
The big surprise was Flaherty’s move to require a minimum down-payment of 20 per cent on investor condos to curb “speculation.” The government’s choice of the word “speculation” was cleverly designed to garner public support because nobody likes speculators, myself included.
The fact of the matter, though, is there is little to no speculation in the GTA condo market because prices are not rising that fast and because the significant transaction costs, which include GST, HST, land transfer tax (times two in Toronto) plus commissions, preclude the quick flipping of condo units.
While we don’t have speculation in the Toronto condo market, we do have significant numbers of small investors who are purchasing units to put on the rental housing market.
Read Stephen Dupuis’ full article “Targeting Toronto condo ‘speculators’ the wrong move” in Metro (March 4, 2010).