TORONTO (Reuters) - Top Canadian federal and provincial officials agreed on Tuesday to try to rein in Toronto’s roaring housing sector, though stopped short of announcing measures, stressing the need to tread carefully and not hurt the national market.
Toronto’s runaway house prices have become a headache for Canada’s government with many first home buyers priced out of the red-hot market. With public frustration growing, Finance Minister Bill Morneau met with Ontario Finance Minister Charles Sousa and Toronto Mayor John Tory.
The three agreed to work together to track data and enforce compliance with tax regulations. Sousa said a “suite of measures” would soon be announced to help boost supply, in part by expediting approvals for new housing.
Without announcing policy decisions, the ministers said their meeting should quell speculation in the Toronto market, which many economists refer to as a housing bubble.
“we are saying that we are serious, we’re serious today and we’re serious over the long term of ensuring that we have the data to get to policy responses that will ensure that we can keep this market stable,” Morneau told reporters after the meeting.
He added that the government would make certain the housing market complied “with anti money laundering rules,” without elaborating.
Sousa and Morneau have jockeyed back and forth over who was responsible for the increasingly feverish market. They seemed to be at odds over whether a tax on speculation or foreign investment was the best approach.
Morneau appeared to rule out changes to federal tax laws to discourage speculation or “flipping,” saying everything Ottawa wanted to say on the capital gains tax was contained in his March budget.
Sousa, whose provincial Liberals are suffering in opinion polls, said he understood there was frustration, anger and anxiety about the unaffordability of Toronto’s market, and he had promised measures to address “affordability” in his April 27 budget.
“Everyone is worried: what if this is the measure that crashes the market?” John Andrew, director of Queen’s University Real Estate Roundtable, said of possible policy decisions.
The average price of a home in Toronto rose by 33 percent to C$917,000 in March from a year earlier, according to recent data. A report on Tuesday showed national prices were up 18.6 percent from a year earlier as strength in Toronto spilled over into nearby cities.
Writing by Andrea Hopkins in Ottawa; Editing by Chizu Nomiyama and Andrew Hay