A foreign buyers’ tax will only lead to stronger price growth in the locales surrounding Toronto, the city’s real estate board warns
Amid the spectacular home sales volume and price growth rates in Toronto, the CEO of the city’s real estate board warned that federal and provincial authorities need to rethink their approach to the affordability crisis.
TREB head John DiMichele noted that the governments’ focus on “allaying demand” should give way to policy solutions aimed at improving supply, especially since there will be no shortage of people wanting homes in a city with vibrant economic prospects.
In particular, a foreign buyers’ tax similar to that implemented by the B.C. government in mid-2016 would lead to “less rental supply, because the number of investors looking to purchase and rent out a property could decline.”
Such conditions might also provoke “stronger price growth in neighbouring communities/regions without a tax,” DiMichele said.
Forecasts as of November 2016 pointed at a possible 10 and 16 per cent growth in the average selling price in Toronto this year, GlobalNews.ca reported.
In a Tuesday (January 31) statement, TREB announced the possibility of double-digit increases in home prices and sales numbers in 2017. The average sale price across all housing types has been predicted to rise to $825,000, up from the previous calendar year’s $729,922.
Between 104,500 and 115,500 home sales will transpire in Toronto this year, the Board added.
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TREB head John DiMichele noted that the governments’ focus on “allaying demand” should give way to policy solutions aimed at improving supply, especially since there will be no shortage of people wanting homes in a city with vibrant economic prospects.
In particular, a foreign buyers’ tax similar to that implemented by the B.C. government in mid-2016 would lead to “less rental supply, because the number of investors looking to purchase and rent out a property could decline.”
Such conditions might also provoke “stronger price growth in neighbouring communities/regions without a tax,” DiMichele said.
Forecasts as of November 2016 pointed at a possible 10 and 16 per cent growth in the average selling price in Toronto this year, GlobalNews.ca reported.
In a Tuesday (January 31) statement, TREB announced the possibility of double-digit increases in home prices and sales numbers in 2017. The average sale price across all housing types has been predicted to rise to $825,000, up from the previous calendar year’s $729,922.
Between 104,500 and 115,500 home sales will transpire in Toronto this year, the Board added.
Related stories:
Toronto Real Estate Board foresees another year of double digit price increases
Toronto and Victoria upward spiral driven by foreign money - BMO
