Ontario’s real estate cooling measures: Unintended consequences?
In the wake of the many new measures imposed by the Ontario government to attempt to cool the Greater Toronto area housing market, REIN’s Senior Analyst has been busy analyzing their impact and their unintended consequences – and sharing his findings on BNN.
Top on his list to discuss are the foreign buyer tax and rent controls. With Ontario’s implementation of the Non-Resident Speculation Tax on the Greater Golden Horseshoe and the City of Victoria now considering a similar tax, Don shared a list of the top five cities he believes the foreign money will flow into next in this segment. Those cities are:
- Victoria, BC
- Ottawa, ON
- Montreal, QC
- Vancouver, BC
- Toronto, ON
Surprised by numbers 4 and 5? According to Campbell we won’t see foreign money pour into smaller housing markets: cities need to be known around the world, with a larger economy so foreign investors know it’s relatively stable and they can get there.
In his second segment (see below), dives into the unintended consequences of Ontario’s new cooling measures he foresees for homebuyers and renters alike.
In the GTA, the individuals who own more than one property are contributing to the supply of the rental market. With rent increases capped at 2.5% while electricity prices and other operational costs continue to rise, Campbell says these people will reach the point where it no longer makes sense to own these properties.
According to our Senior Analyst, as those individuals start getting out of their properties, and the foreign-buyer tax takes some of the higher priced inventory out of the equation, we’ll see average sale prices go down, followed by an extremely tight rental market in the next two years.
To hear more about ‘s forecast for the next few years, watch his full BNN segment below: