The Bank of Canada’s governor says there is increasing evidence of speculation in Toronto’s hot housing market, where the average price of a detached house has surpassed the $1.5-million mark.
Stephen Poloz says demand is being driven more by speculators or investors, rather than by people buying a home for themselves.
He says the market fundamentals can’t explain recent data that showed the average selling price for all properties in the Greater Toronto Area in March jumped 33 per cent from the same month last year.
READ MORE: Kathleen Wynne to meet with Toronto, Hamilton mayors to discuss housing affordability
Poloz says when that happens the rate of price increase is very unlikely to be sustainable, and he is reminding home owners and buyers that prices can go down as well as up.
Ontario Premier Kathleen Wynne has said her government is very close to bringing forward a package of measures to address housing affordability.
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Wynne is meeting with mayors from the Greater Toronto and Hamilton Area today to discuss issues around housing.
While there is no one measure that will change market dynamics, Wynne said she wants the government’s initiatives to “calm” the process.
READ MORE: Ontario housing affordability measures coming ‘very soon’: Kathleen Wynne
“My hope would be that we can make the process of finding a place to live a bit more rational, a bit more predictable, a bit less frantic for people,” Wynne said Wednesday.
Ontario Finance Minister Charles Sousa has indicated a housing package will be in his spring budget, expected in the next couple of weeks. He has floated a number of possible measures, including implementing a tax on foreign buyers, speculators or vacant homes.
He said Wednesday that while market forces will do what is necessary to keep up with demand, he is looking at ways to speed up more supply becoming available.
“People are frustrated,” Sousa said. “Families are pissed that they can’t win bidding wars. And, in times past, young families will get into the market with those entry market homes. They’re hard to come by. So we’re going to figure out a way to help do that too.”
Wynne says she wants to see large home price increases come down, but she isn’t quantifying to what degree she hopes her plan will cool the market.
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