A renowned economist and strategist David Rosenberg, who works for Gluskin Sheff and Associates said that the government’s move on cooling the real estate market in the country will cause a “social risk” to those purchasing homes for the first time. He continued to say there are limited options the government can use to restrict foreign investment in both Vancouver and Toronto. The millennial generation will eventually be priced out by this decision. It is better to have more housing projects which will provide a source to meet demand.
The problem is the area that needs the most attention has been ignored which is insufficient supply. The house prices continue to soar which only keeps out first-time homebuyers but also encourages investors from China to take advantage of this opportunity. The Chinese investors seem to be less worried about the home prices in the marketplace and are still buying as many units without flinching.
Even though $500,000 has been kept aside by the government to settle the foreign investment crisis, the issue of the real estate market cannot be easily solved. Even with the tax payer’s money that has been tampered with by Morneau, – who talked with the senate on Tuesday concerning the housing market issue – it still won’t be able to solve the problem of the limited homes on the real estate market. The only way to go about this is by stressing on zoning regulations to have more houses erected.
Morneau increased the amount needed for a downpayment for the purchase of a house. Despite that, the city of Toronto was still able to set a record of about 13,000 homes sold in the month of May. Before Morneau made an appearance in front of the Senate, there was no question posed about the housing fizz. What is needed now is a solution to this problem.