The Ontario housing market continues to be red-hot. House prices have increased significantly because of supply and demand challenges, often leading buyers to go above and beyond asking prices, engaging in bidding wars in an effort to find housing in a market that can’t seem to meet the demand.
While some homeowners have enjoyed this increase in home values and sold to their own benefit, others have not been able to enter the market because of various factors, including a lack of supply, sky high prices and larger down payment requirements.
The cost of housing isn’t just impacting homeowners. Many renters are also feeling the effects as some landlords choose to arbitrarily drive up rental costs.
This has led many to call for housing reform and governmental action – and the government seems to be listening.
Just last week, the Ontario Government announced a list of measures aimed at cooling the market and making housing more affordable for all (both renters and homebuyers).
Dubbed the Fair Housing Plan, the announcement included 16 measures that, it is hoped, will do just that – make housing prices a little fairer across the province. Here are some of the highlights:
- A new 15% foreign buyer tax – this means that non-Canadian citizens, non-permanent residents and non-Canadian corporations will be charged this new tax on residential properties that have 1-6 units. This tax will apply to property purchases in the Golden Horseshoe area.
- A provision that would allow Toronto and other municipalities (if interested) to charge a tax on vacant or unoccupied units.
- An expansion of rent control which will apply to all private rental units built after 1991. The goal is to protect tenants from “sudden and dramatic” rent increases.
- Examination of ways to investigate practices like paper flipping (shadow flipping).
- Identify new opportunities for the government to create affordable housing on provincially owned surplus lands.
- A $125 million, 5-year program aimed at encouraging the construction of new apartment buildings.
- The creation of a new Housing Supply Team. Their goal will be to identify challenges that housing developers are facing and help them work more effectively with municipalities.
As long as supply and demand continue to be issues, Ontario’s market will continue to accelerate. These changes are expected to be a step towards easing that acceleration. You can view the full announcement here https://news.ontario.ca/opo/en/2017/04/making-housing-more-affordable.html.
What do you think? Do you think these will eventually help to cool the market? Join the conversation @teranet_social.