Generic filters
Filter by Categories

Will the new foreign buyer tax have any impact on the Toronto market?

In this episode we sit down with Riz Dhanji, VP of Sales and Marketing for Canderel. We discuss the new Fair Housing Plan from the Ontario government designed to slow down the housing market. Will the new foreign buyer tax have an impact on the market? How will rent control affect investors and was it prudent to implement?  And finally we discuss Canderel’s recent acquisition of a 1.8 acre site at Bathurst and Lake Shore designed for a mixed use development.


1:40 What is fair, or not fair about the new Fair Housing Plan that Liberals put out?
5:15 Personal perspective of Toronto
8:25 Predictions for the 15% Foreign Buyer Tax on market in the GTA.
9:38 Should they have done something different with the foreign buyer tax?
12:08 Thoughts on rent control affecting market in short term and in long term.
15:47 New site coming up with Canderel, Bathurst and Lake Shore.

Click Here for Episode Transcript

Speaker 1: Welcome to the True Condos podcast with Andrew La Fleur, the place to get the truth on the Toronto condo market and condo investing in Toronto.

Andrew la Fleur: Okay, it’s my pleasure to welcome back to the show returning guest and favorite guest of the show, Riz Dhanji. Riz is the VP of sales and marketing at Canderel, amongst other things. Riz, welcome back to the show.

Riz Dhanji: Andrew, thanks so much for having me on.

Andrew la Fleur: Great to have you again. How you been? I know you got a lot of things on the go. What’s new with you? What’s happening in Riz Dhanji’s world and in Canderel’s world these days?

Riz Dhanji: I think generally there’s a lot of new announcements that will be coming out shortly with myself and some other things that are happening with us. There’s a new site that Canderel acquired on Lake Shore and Bathurst, which is very exciting. Between that and some other things that we’re working on, I think in the next few months some big announcements will come out that we’d love to share with your audience.

Andrew la Fleur: Awesome. Great, looking forward to it, always. Whenever I get a call or an email from you, I know it’s going to be something exciting and big. You don’t seem to work … You never-

Riz Dhanji: Exciting and big, yeah.

Andrew la Fleur: You never work on small little things. It’s always something big, which is great. Of course, want to talk, everybody is … Wanted to talk about the news out of the past week, the fair housing plan, and I love chatting with you and getting your opinions on things. I think we agree on a lot of stuff. You always have a great take on things. What is fair, in your mind, or not fair about this so-called new Fair Housing Plan that the liberals have put out last week?

Riz Dhanji: Yeah, I think … I wrote an article, which you know, you and I discussed about it the minute that it came out, basically the day after. What I think the policy is, is more of a political policy than a policy to slow down the housing market. I don’t think it’s going to have a major impact on our market, primarily because they haven’t really addressed the supply issue that we’re having in the GTA.

The liberals seem to think that developers are hoarding land, so they’ve got a tax policy on land owners who have zoned land and ready to go, but they continue to hold on it, which is flatly untrue. They seem to think that they are going to try and slow down demand, but they just don’t understand that the amount of people that are coming into the GTA on a yearly basis has grown exponentially from a number of years ago. On the basis that maybe the number of volume haven’t grown, but the number of skilled workers that are coming into Toronto is huge.

The interesting thing that happened is, my friend is the executive vice president of MaRS Discovery Center, and he runs about 1,000 startups. He’s in California and Silicon Valley quite a bit. What’s happening is these Trump policies are mitigating the amount of immigrants coming into the US and really scaring everyone.

Canada has made a great policy where we’re welcoming foreign workers to be able to come and help out where we don’t have that talent. They are coming to Toronto and the GTA in droves, which is something that’s not really heavily reported on. Applications to the University of Toronto have gone up almost double by foreign students wanting to come here. That in itself is driving a huge number of people that are coming back to the GTA.

There’s also in-migration that’s happening, from areas like Calgary, and Edmonton, and Vancouver where people may have been from Toronto originally, went out west, and are looking to come back to Toronto. Then you have the general immigration from all other areas around the world, whether it’s China or the Middle East, or Europe, that are coming here as well. It’s just increased even more.

I think our exposure for this city has gotten even more exposure over the number of years. The policies that we put together to welcome these immigrants has been great, and people are looking to Canda. You’ve got this huge influx of people that are coming from around the world, and where are you going to house them? There’s just not enough supply to be able to deal with that. That’s why we’ve seen this run-up in housing prices.

Fair Housing Policy was supposed to target supply, in some meaningful way, and I don’t think they’ve done that. I think that in itself is not going to have an impact on our markets. If not, it’s going to get worse.

Andrew la Fleur: Riz, you travel a lot, I know, especially in Asia. What is the feeling you get from people around the world in other markets with their view of Toronto? What is your personal perspective of Toronto as you’ve traveled the world and as you’ve seen what else is out there, so to speak?

Riz Dhanji: Yeah, one of the things you got to look at … I go to China quite a bit. I speak Mandarin. I know the culture. I know the language quite a bit. If you go to Beijing today, the pollution level is on a level that we could never imagine in Canada. Either smog alerts on a daily basis, people have to wear masks on a daily basis. When you talk to people in China, and they’re saying, “Listen, I don’t want my kids to grow up in this environment where we haven’t really addressed what’s going to be the future for our children. We see Canada as a safe place to be able to take our kids, have them a great education, and live a great life.” You’ve got a big proportion of people that are in Asian countries that are looking to have their kids come, and their families in general, come over to Canada.

Europe is the same thing. There’s many structural issues that are happening in Europe that people are looking at Canada as a great place to be able to bring up my family, as well. The same thing happened in the Middle East and all these other countries. When you go to cities like Singapore, and you go to Hong Kong, it’s great. They’re beautiful cities and everything. It’s overcrowding, but Toronto offers such a great mix of both population growth and diversity that I have not seen in any other city in the world, and I include New York in that aspect.

From that perspective, somebody from anywhere in the world can come to Toronto and really mix in with their own culture like no other city you can see around the world. That is a huge feature for people who are trying to immigrate to various cities that they’re looking for around the world. I think it’s just gotten even better over the past 10 years.

This weekend, I decided that we were going to stay in Yorkville for two days, and just walk around, and go down to Queen Street. What an amazing change the city has occurred, since for 10 years where neighborhoods we never thought would increase and have great retail and great restaurants, are now happening. It’s bustling, and it’s very exciting to be in the city.

Andrew la Fleur: Absolutely. Foreign buyer tax, like you mentioned, you speak Mandarin, you’ve got a connection there. I believe you lived in … Was in Hong Kong you lived in, or lived in mainland China?

Riz Dhanji: Yeah, I lived in Hong Kong for four or five years, but I also studied Mandarin at the Beijing [inaudible 00:08:06] Institute in Beijing.

Andrew la Fleur: Okay, so obviously well-qualified. You’ve sold thousands, and thousands, and thousands of condos, so well-qualified I think to answer this question to look at the foreign buyer tax, the 15% foreign buyer tax, which is now here, very similar to what was in Vancouver. Your predictions for the impact of this tax on our market in the GTA?

Riz Dhanji: I don’t think that’s going to have a major impact on the market. I think when you saw Vancouver go down in value, the real value reduction at that time was perception problem from locals thinking that their houses won’t be able to sell to someone who is foreign. The foreign buyer maybe slowed down a little bit at that time, but if you look at Vancouver today, six to eight months after the tax, it’s on a rampage right now. The condo market is going crazy. I don’t think that, that …

First of all, I don’t think we had that problem as big as Vancouver did, number one. I think it’s less than 5% of buyers that are here that are foreign buyers. Most of the buyers are local, or that their family, or their children are going to school here, or they’ve been here for a few years. I don’t think that that is going to have a major impact on our market at all, and I don’t think it was a well thought out policy, in my opinion, to initiate that.

Andrew la Fleur: Do you think they should have done something different with the foreign buyer tax, or do you think it’s just meaningless, and there’s no point in doing it at all?

Riz Dhanji: I think it’s going to end up being meaningless in the sense that by the time the government actually sets up a task force to monitor this and incur the cost of trying to collect this tax, which logistically is going to be very hard to do, I think it’s going to be actually a negative for them in the long run and a negative for us as taxpayers in general. I don’t even think it was a worthwhile attempt to it. I think the problem is that they did not address the supply issue, which is number one thing.

Just to give you an example on the supply issue, five to six years ago, a typical condominium building, let’s say 30 or 40 stories, would take anywhere between 12 to 18 months to get approval process. Today, that same building is now taking close to 36 months, if not longer. You look at that, you’ve doubled the time of getting an approval for a project, which means that that has just lead to less units that are on the market, less units available for rental and for resale. It’s pushing prices up in the city.

Some policies that happen in King West, where they did a blanket coverage in King West and said a majority of these buildings are going to be heritage. Great, now the developer has to deal with a heritage community. Even though it technically isn’t a heritage designation, you still have to go through that process. That’s just another example of a policy that the developer has to go through.

It’s just adding time, and time, and time for us to get the units on market. It’s a very frustrating thing. It’s all the way through the industry, where developers want to get units on the market, and they just can’t. It’s just not feasible with the policies that are in place and the fact that the planning department doesn’t have enough staff. That’s what they need to address.

Those are the issues to me. If you can get those units from 36 back to 18, you will see a lot more product. You will see more stability in the marketplace, and that’s when we’re going to see a moderate rise in pricing. If that is not addressed, we’re going to continue to see these price increases for a while now.

Andrew la Fleur: What are your thoughts on rent control? Rent control is the other big one. Foreign buyer tax and rent control seem to be the two big headlines from this fair housing plan. How do you think rent control is going to affect the market in the short term and in the long term?

Riz Dhanji: That to me is the largest, is probably the biggest stinger, if I were to say anything. Rent control has not worked in major cities around the world. It’s a failed policy. It was a failed policy in Ontario back when the NEP was in power.

Andrew la Fleur: You mean you’re saying there’s a reason why we got rid of it in the first place?

Riz Dhanji: There’s absolutely a reason, and if you look at that, this was probably 20 years ago when we got rid of it. Only now we start seeing a true increase in purpose-built rentals. It’s taken 20 years to be able to get now institutional investors to look at putting money into the rental apartment side. After 20 years of doing that, they decide to put it back on. It’s the most ridiculous thing I’ve ever heard of in my life, because 65% to 70% of the rental market is governed by individual real estate investors and condominiums. They’ve been supplying it for the past 20 odd years.

Now you’ve put this archaic policy in place where, who knows what happens with rents, with condo fees, after you’ve closed on a unit. Who knows what happens with property taxes. That’s not under our control. Who knows what happens with interest rates. If they go up more than the cost of inflation, which they’re guaranteed to do that, then you’re going to have a lot of people that are going to be in a negative income situation. What does that do? I don’t know. I don’t know if it affects long term or short term.

But the good thing that I know is that, I think Toronto is a more transient rental market, versus certain people decide to stay in their units for a longer period of time. Rent increases haven’t really gone more than the cost of inflation. We’ve got, I know thousands of people who have rented in our buildings that rental increases have been minimal, if not at all. Just need to make sure that they have a great renter in there. I think that what’s going to happen is if the person decides to move out after the first year or the second year, you basically can raise your rent up to market rent after that time. In that respect, I don’t think it’s going to be a major issue on there, but it’s going to be taking some time to get used to.

It could be a little bit of a slowdown in the market, but in general, I think the supply side is going to dictate it, the fact that we don’t have it. You’re still going to have a lot of people that’ll want to buy and live in the city. I always say that the media comes out and talks a little bit of a bigger game than it is, and this has been going on for years, but people know that they want to be able to live in the city, they’re going to buy, regardless of any rules that are in place.

Andrew la Fleur: Yeah, absolutely. Riz, our time is starting to run a little bit short here. Would love to hear anything you can tell us, anything you can share so far about the new site that you’ve got coming up with Canderel, Bathurst and Lake Shore. What other than the fact that you’ve got it, and it’s coming, anything else you can share with our listeners here?

Riz Dhanji: Yeah, 545 Lake Shore is a site that I know Canderel had been looking at for a while. There was a lot of interest from a lot of the parties. The site is approximately 1.8 acres. It is the last prime site on the west side of the city. You know that there’s a lot of development that’s happening on the east side of the city on the waterfront area, but it hasn’t been as developed on a transit basis than the west side, which has already been quite built out.

We feel that this is going to be the gateway to the waterfront as you come off Lake Shore Avenue, and it’s literally across the street from Porter Airlines. You walk right across the street from the site, and you’re right onto the TTC, which is going to have some sort of high speed link right to Union Station. You’ll be in Union Station in 10 minutes. Then across from that is the waterfront trail along the harbor front. It’s got so many amazing aspects to it.

Andrew la Fleur: The new Loblaws is coming in across the street, Flagship Loblaws.

Riz Dhanji: Flagship Loblaws is going to be 50,000 square feet. There’s going to be restaurants in there, and I think Canderel is planning a very mixed use development with residential, and commercial, and some retail that’s going to be a landmark on the waterfront. Let’s put it that way. It’s going to be a very unique offering. It’s something that is going to be, to me, like a last opportunity to be able to get in on a prime waterfront site with all the attributes that you have on the west side of the city, which is very rare.

We’re excited about it. I think the project is going to come out sometime next year, and we’ll have more details as we get closer.

Andrew la Fleur: In terms of scale and scope, just give us a sense of the size of the site, 1.8 acres. Is it single tower or multi tower, high-rise, low-rise, mid-rise? It’s too early to say?

Riz Dhanji: I can’t talk with you right now, because we’re still discussing with the planning community, but all I can see is it’s going to be a mixed use site, and it’s going to be very exciting.

Andrew la Fleur: Great, great. Well, thanks, looking forward to that, Riz. Anything else you wanted to add to the discussion today, or anything else you wanted to talk about?

Riz Dhanji: No, I think there’s going to be some announcements that I’m going to be making very shortly that I’ll let you know about, and it’s going to be a very exciting year for 2017. Look forward to it, and look forward to working with you and your clients on some of the exciting projects that we’ve got lined up.

Andrew la Fleur: Excellent, great. Thanks a lot, Riz, appreciate it. We’ll talk to you again soon.

Riz Dhanji: Sounds good. Thanks a lot, Andrew.

Speaker 1: Thanks for listening to the True Condos podcast. Remember, your positive reviews make a big difference to the show. To learn more about condo investing, become a True Condo subscriber by visiting

Last Updated on