|The Three Amigo's to save the day?|
While no new promises were made, the respective members of all three levels of government came together to discuss and compare notes on what could be done to cool the market, without plunging it and devastating many Canadians at the same time.
Surprisingly, with great optimism, all three individuals came out of the meeting further stressing the importance to provide relief and as soon as possible. Their intention is to table some kind of legislation within a week and before the next provincial budget, in order to get the ball rolling.
Attack fraudulent activity within the real estate sector, which is directly making the current boom a nightmare for many. Introduce measures that assist home buyers and attempt to level the playing field, while increasing supply to combat the current demand.
How will they achieve this?
The Ontario government will introduce legislation that will represent a housing plan. This will most likely boost the requirements on developers to build more affordable housing into their projects, but also bring more money in to directly fund affordable housing projects.
Introducing new rent control will also most likely be on the table, as the only properties in Toronto that currently follow any kind of rent control, are those built before 1991. Originally, this was done to assist in a building boom, which in turn, would lower rents as supply became readily available, unfortunately that didn't work out exactly as planned.
Another aim will be to target real estate agents who utilize bidding wars. By dissuading this type of behavior, the government is hoping that it will not only make it easier for a family to make an offer on a house, but will also allow people the time to properly secure the home before jumping at it.
One of the biggest issues right now in the GTA, is that many people are buying before actually looking at the home, since the bidding wars can result in a home being snatched quite quickly. This means that people are forgoing home inspections and not asking important questions regarding the home, such as: Has there ever been asbestos in this home or has the home ever had a flood or even if the home might be haunted? You can never be too safe, especially in some older neighborhoods in Toronto.
Where the government has already missed the point however, is in its lack of motivation to introduce an increased tax on Capital Gains.Currently, only 50% of realized Capital Gains are taxable in this country, which has motivated individuals to take a risk and buy up property, with no intention of even living in it.
One example of this, is the purchase of unfinished units. People have been purchasing unfinished condos very quickly, only to flip them before the official move in date as the price has most likely increased before then. While there is always a risk associated with these kinds of investments, the current market is literally giving a huge green light, due to how crazy the demand has grown for almost all kinds of housing. This is also contributes directly to an increase in prices, as the rampant purchasing alters the original supply for an almost instant profit.It is also money escaping the government, as people are able to do this quite easily with low interest rates and can purchase more than one unit at a time.
It is going to be important to keep an eye on the Ontario government in the coming weeks, as their legislation has the ability to greatly assist many people in Ontario, who just want to own their own residence.
We still have a very long road ahead of us before any meaningful solutions are implemented to greatly help all Canadians, but the biggest aim right now is to stop an overall crash in the market and also avoid the big R(ecession) word, since that is a word no one wants to hear with relation to a correction in the real estate market.
One thing is for sure, expect to see a lot more condo developments in your neighborhood, as the GTA is pretty much full, so the demand begins to spread to the surrounding areas and beyond just to cope.
Until Next Time!