Cyber Monday Deal: Up to 60% off InvestingProCLAIM SALE

RPT-Canada, Ontario face hard choice as Toronto home bubble builds

Published 2017-04-18, 07:00 a/m
© Reuters.  RPT-Canada, Ontario face hard choice as Toronto home bubble builds

(Repeats April 17 item with no change to text)

By Matt Scuffham

TORONTO, April 17 (Reuters) - Officials from Canada and its most populous province will meet on Tuesday to bring Toronto's hot housing market to heel, under pressure from voters angry that speculators or foreigners are fueling a bubble in Canada's largest city.

While no immediate action is expected from the gathering of Sousa and Toronto Mayor John Tory, the first concerted effort to Finance Minister Bill Morneau, Ontario Finance Minister Charles rein in Toronto house prices, all three are pushing for policy options to cool prices without crashing the market.

Toronto prices rose 33 percent in March from a year earlier and the average price of a detached home surpassed C$1.2 million ($903,000) last month, sparking warnings from Bank of Canada Governor Stephen Poloz last week that speculation is likely at play. and Morneau have jockeyed back and forth over who is responsible for the increasingly feverish market, and appear at odds over whether a tax on speculation or foreign investment is the best approach.

"Everyone is worried: what if this is the measure that crashes the market?" said John Andrew, director of Queen's University Real Estate Roundtable.

In the end, it may be voter anger that drives Sousa to act first, with the provincial Liberal government suffering in opinion polls and measures to address "affordability" already promised in his April 27 budget.

"You're looking to raise your family and grow in the community and you're being outbid and outpriced by people that are just using it as a commodity," said Fred Altbaum, 34, a marketing professional struggling to buy a home with his wife and daughter.

Like many others, Altbaum is calling for either a foreign buyers tax - like the one imposed in Vancouver in August - or a change to capital gains taxes to discourage investors from flipping properties.

A foreign buyers tax will slow but not stop money coming from Chinese investors, said real estate broker Tony Ma, whose HomeLife Landmark Realty Inc is one of the largest brokerages in Toronto serving buyers of Chinese descent.

But even Ma, who said only 5 to 8 percent of the 10,000 deals his 1,100 agents did last year involved foreign investors, thinks it is time for the government to do something about the housing bubble.

"Prices have jumped too fast ... anything over a 10 (percent) increase is an overheated market. As a broker nobody likes it - every night you are a loser (in a bidding war)," said Ma. ($1 = 1.3290 Canadian dollars) (Writing by Andrea Hopkins in Ottawa; Editing by Chizu Nomiyama)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.