A Bit More Detail

Assorted Personal Notations, Essays, and Other Jottings

[URBAN NOTE] “Toronto realtors predict another price surge in 2017”

The Globe and Mail‘s Tamsin McMahon and Brent Jang report on predictions of another record year in Toronto real estate. Some of the sources quoted suggest that foreign investment plays only a marginal role in this boom, though I would note that even margins can be deciding factors in the right places and times.

Despite mounting concerns that international investors may be contributing to the soaring prices and a shortage of homes for sale in Toronto, TREB said any plans by policy makers to introduce a foreign buyers’ tax in the GTA would be “misguided.”

Last year, the board commissioned Ipsos to poll local realtors about foreign-buying activity. Realtors told the polling firm that fewer than 5 per cent of home sales involved international buyers, and just 2 per cent of realtors said they had acted for clients who disclosed that they were buying property in the Toronto area because of B.C.’s tax on foreign buyers in Metro Vancouver.

Tim Hudak, the Ontario Real Estate Association’s chief executive officer, said lack of housing supply is the driving factor behind rising prices in the GTA and “it is easy politics to scapegoat foreigners for increasing housing costs.”

Mr. Hudak, the former Ontario Progressive Conservative leader, has urged Ontario’s Liberal government to reassess its plans for expanding the Greenbelt – protected land on the fringes of the GTA. “Government-imposed barriers are restricting builders from bringing more housing supply online,” he said in a statement on Tuesday.

Douglas Porter, chief economist with Bank of Montreal, said limited supply and robust demand have led to the GTA’s affordability issues. “Toronto would have been strong in any event, but I think foreign interest has contributed to the market that we’ve seen, especially in the last six months,” Mr. Porter said in an interview.

[. . .]

Mr. Porter said that if the Ontario government wants to get serious about cooling off the GTA’s housing sector, it needs to address demand, too. “Why not try to control demand, especially demand that isn’t coming from domestic buyers, at the same time as strengthening supply? We need to work on both sides,” he said in an interview.

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Written by Randy McDonald

February 1, 2017 at 9:00 pm

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