I have held off discussing what the Ontario Government is proposing to cool the housing market but after considerable thought I have concluded nothing. What they have done is damage the investment market by expanding rent controls which will halt all single purpose construction in the GTA as noted in the NP and the Toronto Star. Many of these projects were funded by pension dollars and they are not interested in investing in government price capped markets.
The Finance Minister in an interview does not know what are the market implications of the Foreign Buyers Tax. Will it cool the market, John Robson says Why it is time to hit the roof. The Toronto Star today suggested that a tax belong on the speculators and not foreign buyers. Simply by forcing buyers to close on new construction and not assign the property along with a flipping tax would help cool speculation. MacLean’s article this week Wynn government flies blindly into the housing bubble outlines the folly of the market controls and or for that matter the impact on product availability. Like all governments they are going to study the problem. Unfortunately the problem is that without supply and with continued demand prices will stay high. A liberal spokesperson on the Arlene Bryon Show proposes a capital gain tax on the sale of your principle home. I am sure you can see where this is going.
I spoke to Gary Singh Of Royal Lepage Signature today about the market and he indicated that it has been slowing since the start of the month. This weekend some buyers were parked waiting to see what happens but he believes that it will pick up steam going into May as there is too many buyers.
A paid article Stop Strangling the Middle Class in the papers today highlights that how the over two million acres of land the Wynn government took out of development market has created this mess. No other market driven jurisdiction in the world has done this and along with complex planning and environmental laws we are now reaping the rewards of government planning. You know they have a point.
As an investor in the market homes will continue to be purchased, infill will continue and new condo projects will march forward but be very wary of the impact of rent control on your investment.