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Comment by Tiktaalik | Hacker News Reader

This is a big part of it. It's not that the cities are expensive, it's that they're so unaffordable. This is especially so in Vancouver where the average income (~C43k)[1] is lower than Toronto, and yet prices are higher.

The large disparity between local incomes and housing prices is a major reason why there is so much attention on the implications of foreign capital on Vancouver's housing market. It seems like there hasn't been as much concern or interest in Toronto, but there probably should be.

[1] http://www.theglobeandmail.com/real-estate/for-vancouver-hou...

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Vancouver real estate is the way it is because it has been targeted by Chinese ponzi schemes, bank fraud schemes, and money laundering:

http://www.theglobeandmail.com/real-estate/vancouver/out-of-...

http://www.theglobeandmail.com/real-estate/vancouver/canadia...

http://news.nationalpost.com/news/canada/chinese-police-run-...

Alas, another victim of media hype.

It's fascinating watching the carnage on mls now, with the 15% tax in place. No one can sell their houses now. And everyone seems to have a story about holding an open house that no one attends. The money is just gone.

It's just like the market collapse back in the late 80's when interest rates climbed into the double-digits; no discretionary seller wants to lower their price from $1.3 million when that was a feasible offer 2 months ago, but no one wants (or rather no one is left) to offer that price. The market just seizes and eventually non-discretionary sellers are left to define the market.

It doesn't look like TO will implement the foreigner tax. Just hear talk but no action. Frankly, the amount of the tax is so tiny, it makes me believe that there is something else afoot. In any case, I'm dreaming of the day housing becomes affordable in Canada once again.

Frankly, the amount of the tax is so tiny, it makes me believe that there is something else afoot.

It won't make any difference at all to the dozen or so billionaires who are looking to buy their Nth house in Vancouver. But it has devastated the detached housing market below $5 million here and that will ultimately put pressure on condos and townhouses. I think the only reason it's working is that TO and Seattle don't have a similar tax; Vancouver has made itself less attractive, but only marginally so.

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