On Tuesday, April 18th Finance Minister Charles Sousa announced that he is set to unveil 10 measures to help with Toronto's out of control housing market, which will be released as early as Thursday. These measures will range from rent controls to a new tax on real estate speculators.
The release of Charles Sousa's plan will be about a week ahead of the release of the first balanced budget since 2008.
Tuesday for the announcement, Sousa met with Federal Finance Minister Bill Morneau and Toronto Mayor John Tory. They met for an hour to discuss housing issues which included a discussion on current market trends, and what the intentions are with the plan with focus on rent controls and addressing the current policy that excludes buildings built after 1991 from rent controls.
Expectation on Rent Increases
From an article released by the Toronto Star, the expectation on rent increases, when the 10 measures are implemented is that the annual increase will be 3.5% which is significantly better than what some condo owners have been subject to, such as having their rental cost double.
Housing Speculator Crackdown
Part of Charles Sousa's plan is to place a levy on housing speculators and foreign buyers. This could include a vacancy tax to discourage investors from leaving their properties empty, to either rent them out or move in themselves if possible.
All Government Levels Serious
With all levels of the government working together to control Toronto's housing market, they want to make it clear that they are taking the current state of the market seriously and have decided to have quarterly meetings focusing on housing. All of this seems like a step in the right direction, as the Bank of Canada governor recently said the 33% yearly increase that we have seen is deemed as unsustainable.
Once the plan is released, the public will have a better idea on what these 10 measures are going to address. The most important thing about this plan is that its goal is to protect buyers and sellers, while stabilizing the housing market.
Tim Hudak, CEO of the Ontario Real Estate Association, stated that he believes the best solution is to get new homes and the supply of homes up, the amount of supply available is the issue. With higher supply, the hope is to limit the number of bidding wars that occur, in turn lower the prices that homes go for. His final note was that he likes that all levels of the government are getting involved, it is a good thing they all want to work together to solve the problem.
Until the plan is put into action, which is expected to be announced on Thursday we'll have to put our trust in all levels of the government that they will be able to successfully manage Toronto's hot housing market.
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