Not totally a CMHC issue here. People/businesses buying up housing as investments is the bigger problem and it should be clamped down on … ie: first 2 properties = basic taxes, increased by 2% for every additional property owned (3rd is basic + 2%, 4th is basic + 4%, etc).
If it’s purchased as an investment, but still rented out, how does that make housing less affordable?
I fully support vacant home taxes, but the idea that investors (and people often blame foreign investors specifically) are to blame seems flawed to me.
If there was enough housing supply, prices would drop, no?
Housing becomes less affordable because suddenly rent has to cover the owner’s profit as well as the cost of the mortgage. No one is going to invest in housing if there is no profit, and they are going to do what they can to make the profit as high as possible.
A landlord is essentially a middleman between the mortgage holder and the resident. Renting can make sense, especially for people who are not living somewhere for a long time, but currently people are renting simply because there is no way they can afford to buy a house.
There’s nothing saying rent has to cover the owner’s expenses.
If no one rents a home, the owner must either: leave the home empty, or lower the rent. Either way, if the home loses money, a rational investor has to sell. Enough people selling causes prices to drop.
I guess what I’m saying is that taxing people who own multiple properties extra is a really weird fix.
Wouldn’t building more homes be a better long term solution?
