A warning was made by the CEO of the Royal Bank of Canada that the expansion of Canada’s economic could be inhibited by the overheating of the real estate markets. The price of homes in Toronto has gone up last month, with home sales following behind according to an industry report. Many are frightened of the housing market being at risk of a housing bubble, many hope something would be done to have the market eased. A 15 per cent tax on foreign buyers was endorsed in British Columbia last year, some economists are proposing the same measures to be enacted in Ontario.
McKay said at the RBC annual meeting; “Any single solution is unlikely to be successful on its own. A complex problem like this requires a multi-faceted solution, which addresses supply constraints and speculative forces and is mindful of the rate environment, which can be a moderating force. We would welcome any effort by the three levels of government to coordinate their interventions, and to do so reasonably quickly.” Ontario is now under a lot of pressure even with the majority of economists in Canada assuming the housing market in Toronto is facing a bubble. Bill Morneau, Minister of Finance said that national policies will not do any help in having the problem settled.
It’s become even more impossible for most Canadians to have become a homeowner, mostly in places like Vancouver and Toronto, McKay said; “All of these factors are mixing to push prices up to unsustainable levels, stressing household balance sheets and locking many people out of the housing market.” He added; “The media reports over the last few weeks characterize an environment that is not consistent with our experience, our culture, or our values. It is not the RBC that I know, that our clients know, or that I have grown up with for nearly three decades.”