The measures to cool southern Ontario’s rapidly overheating housing market could not have come a minute too soon. Every Torontonian has heard or read about properties selling for thousands of dollars over the asking price and the crazy bidding wars. Housing has become a staple conversation topic in every circle.
Hoping to prevent what many financial institutions and experts have been calling a housing bubble that could burst, Ontario Premier Kathleen Wynne on Thursday announced details about her government’s measures aimed at cooling southern Ontario’s red-hot housing market amid fears about soaring prices and falling affordability.
• A 15 per cent tax on home purchases by non-resident foreigners.
• Expanding the province’s existing rent control system to cover all tenants.
• A rebate of development cost charges to encourage building of more rental housing.
• A standardized lease document for all tenants.
• A ban on flipping of pre-construction units by speculators.
• A review of the rules governing the conduct of real estate agents.
The average price of detached houses in the Greater Toronto Area rose to $1.21 million last month, up 33.4 per cent from a year ago, but Wynne says the issue extends throughout the Golden Horseshoe area.
Sousa says investing in real estate is not a bad thing, but he wants speculators to pay their fair share.
He says the measures will also look at how to expedite housing supply, and he has appeared receptive to Toronto Mayor John Tory’s talk of a vacant homes tax.
While the 15 per cent foreign buyer tax in Vancouver worked to bring down property prices, there are signs that prices are once again climbing. Here in Toronto, it may well turn out to be a temporary fix and as Finance Minister Charles Sousa points out, it is the speculators that need to pay their fair share. Too many residents in the GTA have contributed mightily to the problem of affordability by buying that second and third property for purely speculative purposes. By wiping out the inventory of homes for sale, these domestic speculators have driven up the cost of home ownership for all, especially first-time homebuyers who simply can’t compete against established Torontonians who leverage their existing home to invest in starter homes meant for first time home owners. This travesty has forced these would-be homeowners to rent from these landlords, some of whom could well be called slumlords. – CINEWS