This is a small step in the right direction. The cost of housing for Canadians is an imminent crisis that needs to be addressed soon or a generation of families will be unable to afford a home. (And to those who feel this is not their problem, keep in mind that the extra $500,000 someone sinks into a huge mortgage is money that will never be spent buying goods or services from other Canadians--this will create a hangover of decreased consumption and impaired economic growth that could last years). 

Foreign capital is undoubtedly a driver of rising house costs. Our limited data from Vancouver support the role of speculation. This intervention will help but will not prevent a foreign investor from simply assigning a child or spouse as the resident and still claiming the deduction. There should be tighter controls on how money is allowed to enter the market.

Housing in Vancouver and Toronto is currently 10.8 and 6.7 times median income. This is unsustainable. Canada must take action.