Canada, Ontario face hard choice as Toronto home bubble builds

Tue Apr 18, 2017 12:10pm EDT
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By Matt Scuffham

TORONTO (Reuters) - Officials from Canada and its most populous province will meet on Tuesday to try to cool Toronto's hot housing market, 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 Finance Minister Bill Morneau, Ontario Finance Minister Charles

Sousa and Toronto Mayor John Tory, all three are pushing for policy options to contain prices without crashing the market.

The average price of a home in Toronto rose by 33 percent to C$917,000 in March from a year earlier, a report showed on Tuesday.

The sharp rises have led to fears first-time buyers are being priced out of the market.

"I have three young millennials at home and I don’t know how in the world they’re going to get a starter home to get into the market," Sousa told CBC News ahead of the meeting.

Sousa 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.   Continued...

Construction workers chat on a condominium building site in Toronto, Ontario, Canada October 3, 2016. REUTERS/Chris Helgren