Ontario Set to Unveil Its Plan to Cool Toronto Housing

20 April 2017

Ontario Finance Minister Charles Sousa plans to announce steps on Thursday to cool the Toronto region’s hot real-estate market, according to a government official from the province.

The measures are intended to improve housing affordability, the official said, asking not to be identified because the plans aren’t yet public. The official didn’t comment on specific measures other than to say they would address supply and demand. Sousa spokeswoman Jessica Martin declined to comment.

The Toronto Star reported earlier, without saying where it got the information, that Sousa will announce some 10 measures ranging from rent controls to a new tax on speculators. The move comes a week before the provincial budget April 27, and two days after Sousa said the government recognizes that "now" is the time to address runaway home prices.

Home prices in the Toronto area climbed 6.2 percent last month, the biggest one-month gain on record, according to a benchmark price index by the Canadian Real Estate Association, and are up almost 30 percent over the past 12 months. Bank of Canada Governor Stephen Poloz said last week the price gains are “divorced” from the typical measures of demand, such as income growth and demographics, and said they are unsustainable.

Sousa on Tuesday met Canadian Finance Minister Bill Morneau and Toronto Mayor John Tory, who said that possible steps include taxing homes left empty for speculative purposes. Rent increases on newer buildings may be limited to about 1.5 percent above the inflation rate, which was at 2 percent in February, the Toronto Star reported.

While rent control would help keep costs down, “the challenge is that we have a housing shortage in this city,” Phil Soper, chief executive officer of Royal LePage, a unit of Brookfield Real Estate Services Inc., said by telephone Wednesday. Rents in Toronto haven’t kept pace with property values and controls would limit new investment and hurt supply, he said.