The Globe and Mail reports from Canada. "A year ago, when Bank of Canada Governor Stephen Poloz cut interest rates for the second time in six months, we knew we’d have to take the bad with the good. Slashing the bank’s overnight rate in half to 0.5 per cent would surely further inflate regional real estate bubbles. But that, we figured, was just the price to pay in order to fuel non-energy exports and a sustainable recovery."

"Hewers of wood and drawers of water, not. Canada is now a real estate nation, with little else to keep the economy from sinking into an even deeper funk. Gross domestic product shrank 0.1 per cent in May, and that’s after excluding the negative impact of Alberta’s wildfires on oil sands output. Yet, we’re still buying houses like there’s no tomorrow. And there may not be a tomorrow for the suckers who buy in at the peak, whenever it comes."

"The so-called economic rotation from oil to manufacturing exports that rate cuts (and the related decline in the Canadian dollar) were supposed to produce has not only failed to materialize but policy makers have pumped helium into an already overheated real estate sector that is masking structural weaknesses in the economy and setting us up for a bigger fall."

"Politicians who claim to be fighting for the middle class have priced most of them out of the Toronto and Vancouver housing markets. But worry not. B.C. has slapped a 15-per-cent tax on foreign buyers and Ontario could follow, while Ottawa is contemplating raising minimum down payments and slapping a hefty deductible on banks’ insured mortgages."

"These and other demand-side policies might indeed lead to a real estate slowdown – to wit, the 18-per-cent year-over-year drop in Vancouver home sales in July. But at what cost? If prices do start to fall, even moderately, buyer psychology will shift rapidly and a reverse wealth effect will set in. A real estate crash (which bypassed Canada during the last recession) could become a self-fulling prophecy. On the bright side, policy makers might finally get their economic rotation."

From Metro News. "Following the introduction of B.C.’s 15% tax targeting foreign homebuyers, realtors say local buyers no longer seem to be feeling the FOMO that had been spurring them to compete in bidding wars."

"'What it did, in my opinion, it’s changed the behaviour of the locals where everybody before was rushing in to buy something, going in way over their head with multiple offers,' said Steve Saretsky, a realtor with Sutton Group West Coast, describing a situation in which local buyers expected prices to continue to rise because of interest from foreign buyers. 'Then (the tax) came out and everyone’s like oh, all these foreign buyers are going to leave the market, maybe I’ll wait.'"

"There has already started to be some price reductions in some detached homes in Richmond and Tsawwassen, Saretsky said, markets that had seen detached home prices rise a nosebleed 47 and 42 per cent, respectively. 'It just couldn’t keep going,' Saretsky said."

The Nelson Daily. "Last week the province instituted a tax on foreign ownership, increased fines for realtor misconduct and moved to create a provincial superintendent of real estate, who will take over all regulation and rule-making duties from the Real Estate Council of B.C. The moves are in response to the ongoing public outcry for reigning in skyrocketing real estate prices in the Lower Mainland and drafting tighter controls for the industry across the province. However, the need for control of a market gone wild in the rest of B.C. is not reflected in the market of Nelson of the present day, say some local realtors."

"In fact, Valhalla Path Realty’s Robert Goertz doesn’t foresee a foreign ownership tax being implemented in Nelson, since the heritage city does not have the same issues with foreign ownership as Vancouver does. 'People are buying in Vancouver on speculation. People who own homes in Nelson use their homes, even if it is as a secondary dwelling,' he said."

"But Century 21 realtor Brian Euerby said a foreign ownership tax may come to pass in Nelson, even though the tax was largely targeted toward those from mainland China that are making offers without seeing the properties. 'The demographic of the (buyers) would suggest they prefer the larger urban lifestyles,' he said about Nelson. 'That said, though, this model is being watched carefully by other levels of government and there has been some discussion that this tax may well spread throughout the entire province if foreign ownership spreads to the Interior.'"

"The province could allow the City of Vancouver to impose a tax on vacant homes, with a city-led study finding over 10,800 empty homes in the city in 2014. The province could allow other cities to implement similar taxes. 'You would be surprised as to how many vacant homes there are out there, but none of which I would suggest are as a result of the foreign buyers that are being targeted on the Lower Mainland,' Euerby said."

"'People need a place to live and rising prices are the reality they are faced with even if it means over extending themselves,' Euerby said. 'I personally believe people are over extending themselves to reach up for prices. Any rise in the interest rates and this is going to tip many over the edge, a society that is already statistically spend $1.60 for every $1 earned.'"

"And a good deal of the $1.60 is simply debt service, he said. 'If this tax, and it is substantial, spreads nationwide, it will have an impact,' he said. 'Two things are driving this market: foreign investment in larger urban centres; and low interest rates. If one or the other of those is taken out of the equation then Houston, we have a problem. If both change, well ... stay tuned.'"