Quote:
Originally Posted by jlousa
Guys Jebby is absolutely correct from an economic standpoint. You have two buyers today, one buys a completed unit and removes a units from the market place and pays no tax. You have a second buyer that bought a presale last week, they aren't removings a unit from the market place, they are creating a unit, yet the second buyer gets dinged with a 15% after the fact. How can anyone argue that makes sense? Sure if they bought after the tax is implemented it would be one thing but doing it retroactive is bad policy.
This is going to cause a reduction in future supply. And although it will make a slight dent in prices, it won't do much, if you can't afford anything today would you be able to afford if prices fall 10-15% or even 20% from the recent highs? What I expect to see is the reduced new supply create upward pressure on rents hurting the very people that need the most help. The proper solution was not to have kept interest rates so low for so long, but raising them would hurt too many voters so it wasn't done. Short shortsightedness.
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I disagree that this will cause a reduction in future supply, unless that supply was only being built to satisfy foreign demand in the first place. If what was being built to satisfy offshore demand, then it is no surprise developers were pricing to take maximum advantage of what offshore buyers were willing to pay, and locals were getting burned as a result.
Yes, it is unfair that some people are getting burned by not completing until after August 2. Perhaps the gov't should have made an exception for those with a signed contract. However, given the complete lack of ethics shown by so many in the real estate industry lately, can you blame the bureaucracy for not trusting them with regards to who has signed as of the day the tax was announced?
Central banks certainly deserve blame for fueling the problem with their chicken little approach to interest rates. Rock bottom rates should be a tool of last resort, not permanent policy.
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