TORONTO — Soaring house prices in Toronto have local and provincial governments scrambling to come up with solutions, but Ontario’s finance minister cautioned that there’s no “silver bullet.”
Charles Sousa's comments followed the release of the latest data from the city's real estate board that showed the average selling price for all properties in the Greater Toronto Area in March was $916,567 — a 33-per-cent jump from the same month last year.
The provincial Liberal government is preparing a package of housing measures that Sousa has said will be included in the budget he is expected to table later this month.
But "there is no silver bullet," he said, noting that there's no consensus from stakeholders on how best to proceed.
"What's evident and what's obvious is that pricing in the GTA has gone up tremendously," he said. "We've got to find a way to help."
Sousa also suggested that it was hard to predict the market's reaction to any government intervention.
"To what extent any one measure will have a positive impact or negative impact is questionable and we're still trying to ensure we put nobody in harm's way," he said.
Both Sousa and the Toronto Real Estate Board have said one of the underlying causes of the soaring prices is that demand for housing continues to exceed supply.
The number of properties listed on the market in March was up by 15.2 per cent from the same time last year, but the number of sales rose by 17.7 per cent.
Ontario Premier Kathleen Wynne has said that the government is looking at how it can help speed up construction.
"There are people coming to us saying, 'I want to build, I've got land, but the process is so cumbersome that I can't build fast enough,'" she said. "So it's not just whether you can build or not, but the availability of supply, so how long it takes to get from purchase of land to actually building."
Toronto Mayor John Tory, meanwhile, called the current situation "deeply troubling" for people who are trying to buy homes, and said he may consider imposing a tax on vacant homes.
Ontario Housing Minister Chris Ballard said the government has to be aware of what consequences could arise from any measures.
"For many Ontarians their house is the biggest asset that they have, they're looking at their house as something that will get them through their retirement years," he said. "So, we have to be cautious — at the same time recognizing that for so many Ontarians they feel shut out of the housing market."
The province already doubled the rebate on its land transfer tax for first-time homebuyers to $4,000 — and simultaneously raised the same tax on homes that sell for more than $2 million — but the government has said it is considering more measures targeted at new buyers.
"The growth year over year has been tremendous and that is making it difficult for first-time buyers to get into the marketplace," Sousa said. "It used to be you could get in with a starter home. Well, what is a starter home in the GTA?"
Sousa unsuccessfully urged federal Finance Minister Bill Morneau to include in his budget changes to the taxation of capital gains on the sale of homes that are not classified as a primary residence, as a way to address speculative investors flipping homes.
Morneau hasn't ruled out future changes to the way capital gains are taxed and said April 5 he is closely attuned to housing discussions at the provincial and municipal levels.
"We certainly don't have all the tools," he said. "So, there are tools at those other levels of government that can have an important impact. Co-ordination and considering how we can best meet our objectives will certainly be in our next steps."
Sousa has also said a foreign buyers' tax was back on the table in Ontario, after dismissing that option a year ago.