August 13, 2015 / 12:20 AM / 2 years ago

UPDATE 3-Canada PM vows to track, possibly limit foreign home buyers

(Adds commentary from Vancouver real estate agents, academic, context on housing markets)

By Randall Palmer and Julie Gordon

OTTAWA/VANCOUVER, Aug 12 (Reuters) - Canadian Prime Minister Stephen Harper pledged on Wednesday to track and possibly limit foreign purchases of Canadian real estate if reelected, but the move was not expected to cool foreign buying anytime soon.

“There are real concerns that foreign, nonresident real estate speculation is the reason some Canadian families find house prices beyond their budgets,” Harper said while visiting suburban Vancouver.

The announcement hones in on fears in Vancouver that foreign money - mostly from mainland China - is driving rapidly rising housing prices, fueling calls for government to track international buyers and impose restrictions.

If the Conservatives return to power in the Oct. 19 vote, Harper said his government will start collecting data on Canadian real estate purchases by nonresident foreigners.

If necessary, he would coordinate with Canada’s provinces to ensure that foreign, nonresident investment “supports the availability and affordability of homes for Canadians”.

He did not provide details of what might trigger such a step.

But Vancouver real estate agents questioned whether the measures would have much impact on the city’s red hot property market because recent changes to immigration policy did little to discourage Chinese interest.

“Tracking is one thing and restricting buyers is another. Simply tracking won’t have any impact,” said Andrew Hasman, who sells on Vancouver’s west side, one of the most popular areas with Chinese buyers.

Hasman added that even if restrictions on non-resident buyers were introduced, many would find other ways to invest, such as through relatives and friends already living in Canada.

Indeed, foreign interest in Vancouver has climbed in recent years, agents say, despite Canada freezing its controversial millionaire visa plan in 2012, and then scrapping the program last year.

The Conservatives said they are looking to countries such as Australia and Britain, that have also grappled with foreign money distorting their domestic markets, as possible models for future actions.

Andy Yan, an urban planner with Bing Thom Architects, said the platform was well thought-out, but noted it should also consider the impact of newcomers who continue to live off fortunes earned abroad.

“How much of it is this non-resident foreign buyer versus, say, a recently naturalized Canadian citizen with lots of global capital?” he said. “I think you have to back it up and talk about that.”

In another step to deal with affordability, Harper promised to increase the amount that first-time home buyers can withdraw tax-free from their registered retirement savings plans to C$35,000 from C$25,000.

$1=$1.30 Canadian Additional reporting by Leah Schnurr; Editing by Peter Galloway, Andrew Hay and Ken Wills

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