Ontario finance minister; Charles Sousa said a foreign buyer tax is one possible option he’s looking at to cool the housing market on Thursday.
The average price of homes sold in the Greater Toronto Area last month rose 27.7 per cent over last year, and the average price of a detached home in Toronto is now more than $1.5 million.
He said he is “keenly aware” of how quickly house prices have risen over the past year.
“A year ago I was thinking, ‘Let market forces prevail,’ but now I’m concerned about . . . the ability of people to enter the marketplace.” Sousa said.”(There are) bidding wars everywhere you go, it appears, and I’m sensitive to that. I’m sensitive to the degree of fast appreciation in the short term and what will that do over the long term.”
Sousa said he is considering a number of options for next steps, and “a foreign tax is just one.”
In Ontario, the housing market has been heating up not just in Toronto, but across the whole Golden Horseshoe — the area surrounding the Great Lakes — Sousa said.
It’s not clear yet if foreign buyers are driving up demand or not, he said, noting Ontario has also been receiving a greater share of inter-provincial migrants lately. In the third quarter of 2016, about 11,600 people moved to Ontario from other provinces, reversing a trend in recent years of more people leaving Ontario for other provinces, according to Ministry of Finance data.
If measures are taken in Toronto, Sousa said he would worry about the impact elsewhere. “If there’s an appreciation happening and you start to poke a bubble, to what extent am I then implicating something with unintended consequences for other parts of the region?” he said.