Increased Probability For Government Intervention In Toronto

The way things are looking up in the Toronto housing market and at its current state, it is becoming an increasing possibility for the government to interfere as the Royal Bank of Canada cautioned in a report released during the month of January. Reuters reported that the comment was made in the light of the recent numbers that showed the sale of homes in Toronto which was an all-time high during last year.

Economist of RBC penned down in the bank’s Canadian Housing Health Check for January; “The likelihood of policy intervention to address housing risks in Toronto is increasing.” In additional to that, RBC said the single-family detached sector has kept the overheated pace of the expansion of their prices stable as a result of scarceness in the market.

What we don’t know is whether or not the necessary laws and regulations would be endorsed by the financial regulator of the country, the provincial authorities or the federal government. None of that was made mention in the report. The Canada Mortgage and Housing Corp (CMHC) cautioned that Toronto and five other main metropolitan markets in the country showed strong signs and a high probability of conditions that will turn out to be a huge problem.

Chief economist, Bob Dugan made mention in his statement; “Price acceleration in Vancouver, Victoria, Toronto and Hamilton indicates that home price growth may be driven by speculation as it is outpacing what economic fundamentals like migration, employment, and income can support. For this reason, homebuyers should ensure that their purchases are aligned with their needs as well as the long-term market outlook.”