We, at Robert Floris’ Mortgage Architects office on the East Mountain of Hamilton, Ontario, always look for trends in the future of mortgages and local real estate. Today, we look at history (and the future?). The date was April 9, 2974 and it was the day that a speculation tax of 50% was placed on land. did it slow down the market? The real estate market, especially in the GTA, took a beating.

Fast forward to today, and the Ontario government just put in a foreign tax speculation at 15%. The market were very similar at the time in 1974. Obviously, with record low mortgage rates, the boom in prices is having a far greater impact not only in Toronto, but throughout Southern Ontario in today’s market.

The government is trying the foreign tax since their other measures including:

• shorter mortgage amortizations
• higher mortgage rates to qualify
• restrictive debt inclusions in mortgage calculations

All have not worked!!

People always ask me my opinion as to what might happen. Well, in 1974 mortgage rates were 12%, so in my humble opinion, the market would have slowed on its own. Here are the three things that could hurt this market:

1. Higher mortgage rates.
2. Economic recession.
3. More meddling by the government with regulations.

I really believe the foreign tax of 15% implemented by the Ontario government will have little or no effect.

Robert Floris is a mortgage agent serving Hamilton, Ontario and the GTA.