As home prices in Toronto continue to rise, the Royal Bank of Canada stated that the housing market has high chances of having policies introduced to cool down the housing prices just like several new laws were implemented in Vancouver.
This warning came from the Royal Bank of Canada in its January Canadian Housing Health Check. But one thing the bank was not sure of is whether the new measures will come from the federal government, provincial government or Canada’s financial regulator.
Just last year, Vancouver saw a 15% tax imposed by the provincial government in British Columbia on foreign buyers to help cool down the high home prices in Vancouver.
According to Canada’s federal housing agency, home prices in Toronto are not only affecting its residents but also other nearby markets.
Currently, Canada has six cities that have high prices and Vancouver and Toronto are in the list. But although some other markets experience a drop in prices, high prices are still evident in some markets that affect other markets.
Canadian Mortgage and Housing Corporation chief economist Bob Dugan expressed that prices increase in Vancouver, Toronto and other markets is just a manifestation that home prices are influenced by certain factors and it is going beyond the limits of economic necessities such as migration, employment and income.
However the Vancouver home prices had begun to cool down in the final quarter last year and although a large number of experts attribute this decline to the tax, some however disagree stating that the market had already begun to cool down before the tax was implemented.
On the other hand, home prices continue to surge in Toronto most especially single detached homes. The city also continues to face a short supply of new homes as many sellers are continuing to list their homes.