It’s no secret that Toronto’s real estate market is rising at an alarming rate. Just in the month of March, it was announced that the average home price increased by 33.4%, year-over-year.
The average price for a detached home in Toronto currently sits at $1.21 million.
In response, Toronto Mayor John Tory, Federal Finance Minister Bill Morneau, and Ontario Finance Minister Charles Sousa agreed to meet this past Tuesday to discuss how the government can intervene in this hell fire of a housing market in the Greater Toronto Area.
After the meeting, the government figures agreed not to place anymore housing measures that would further increase housing demand in Toronto, with promise of cooling measures being implemented soon.
And today, we’ve learned of those new measures.
Ontario Premier Kathleen Wynne spoke at a media event this morning in one of Toronto’s fastest-growing neighbourhoods, Liberty Village, to announce 16 official measures being placed to slow down the rapidly rising market.
Three of the most-anticipated measures included a rent cap, a vacant property tax, and a foreign buyers tax modelled after the one recently introduced in Vancouver’s red-hot market.
Premier Wynne outlined the following initiatives:
- A 15% tax on home purchases by non-resident foreigners in Toronto and the Greater Golden Horseshoe. It should be noted that this new tax will not apply to new immigrants; only those who intend to just speculate and "never set foot in Ontario."
- Giving Toronto and other municipalities the ability to introduce a vacant home tax, in hopes of pushing owners to sell or rent unoccupied units.
- A ban on flipping pre-construction units by investors and speculators.
- A review of the rules governing the conduct of real estate agents.
Some measures also placed a huge focus on increasing housing supply, most specifically rental units:
- Expanding the province's existing rent control system to cover all tenants. Current rent control only protects those who live in buildings built before 1991 from substantial rent increases. Rent hikes will now be limited to the rate of inflation, which sat at 2% back in February. But landlords can apply for an exemption if they can prove that they’ve made considerable property amendments, therefore, increasing the value of the building and units.
- A standardized lease document for all tenants.
- A$125-million, five-year program that involves a development cost rebate to encourage builders to develop more rental housing.
- A move to identify provincially-owned surplus lands that could be used for affordable and rental housing development.
- An eviction policy that rules if a landlord evicts a tenant so that he/she or a family member can occupy the unit themselves, the landlord has to give the tenant one month's rent as compensation or offer the tenant another acceptable rental unit. The landlord (or family member) then has to express intent to occupy the unit for at least a year. If they advertise, re-rent, demolish or convert the unit into a short-term rental within a year, they could face a fine of up to $25,000.
“When young people can’t afford their own apartment or can’t imagine ever owning their own home, we know we have a problem,” Wynne said this morning. “And when the rising cost of housing is making more and more people insecure about their future, and about their quality of life in Ontario, we know we have to act.”
Though the Toronto real estate market has been of most concern, Wynne says the issue extends beyond the GTA and plans to apply similar initiatives throughout the Golden Horseshoe area.
This post has been updated.