How skyrocketing Toronto house prices could impact Nova Scotia
Healthy housing markets in any region help fuel the economy.
“There’s all the trickle down and multiplier effects of what people invest in their home. Be it construction, be it furniture, be it where people buy determines where they shop,” said Chad Haliburton, a real estate agent in Nova Scotia.
But sometimes markets can get out of control with skyrocketing house prices and the government is forced to intervene with policy changes.
Such is the case in Toronto, where on Tuesday all three levels of government met to discuss how to slow the market that’s severely restricted what buyers can afford.
The average price of detached houses rose to $1.21 million last month, up 33.4 per cent from a year ago.
“We’re concerned that price increases, particularly in the GTA, are putting the dream of owning a home out of reach for middle class families,” Federal Finance Minister Bill Morneau said, during Tuesday’s discussion.
Out of control housing markets in Vancouver and Toronto have sparked nationwide concern.
But Haliburton said potential policy changes could negatively impact slower markets like Halifax.
“The government nationally makes policies a lot of times, country-wide based on the two major markets of B.C. and Toronto. The problem with that is, those kind of contracting polices or practices, that are designed to slow down big markets, can also have a negative effect here in slower markets,” he said.
While sales outside of Halifax and Dartmouth have been slower over the past few years, Haliburton says overall the regional market is stable.
“Here we’ve been quite strong historically, kind of slow and steady, unlike some other markets that have been more boom and bust,” he said.
Policy changes are aimed at controlling the market.
Last fall, the federal government rolled out new mortgage rules aimed at protecting Canadians against potential interest rate increases.
The federal rules went into effect last October and include a stress test for all insured mortgages. The test was previously not required for a fixed-rate mortgage that was longer than five years.
Haliburton says while it has reduced the buying-power of some clients,
He believes the change has really only impacted two types of buyers.
“One, would be the buyer who’s testing the limits of their approval as it is. The other that it’s unfortunately effecting is single-income buyers. Automatically, their income figures are going to be lower than a two income situation,” he said.
Haliburton said buyers should practice “fiscal responsibility” to ensure they can withstand any possible market changes.
—With files from Leslie Young, Global News
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