What Can The Government To Do “Cool The Market?”


8 minute read

April 12, 2017

I’ve written several blogs on this topic before, often while hinting that the answer to the rhetorical question, is “nothing.”

Only now, it seems as though the government is jet-set on dumping a bucket of ice on the city of Toronto.

I mentioned the Globe & Mail article from last Wednesday, which set out a slew of potential ways to cool the market.

Today, I want to look at those one at a time, and see if we can come up with anything else on our own…


What a cute photo!

There’s nothing quite as misleading as making your heart melt, just before we break it…

Great debate on Monday, folks.

Friends, family, colleagues, random blog readers – they all tell me, from time to time, that while they enjoy my blogs, they love reading the comments as well.

I rarely, if ever, monitor comments.  It’s a testament to the readership I’ve blessed with on TRB.

And with every post, you folks add value with your knowledge and insights, unlike 99% of all comments, found on the Internet.

For that, I thank you.  Again, and again.

I value your insights and opinions, and as the content of TRB has become far more political and “big-picture” in 2017, I enjoy seeing what people think.

That’s why today, I wanted to see what somebody else has come up with in terms of “ideas” on how to cool the Toronto housing market.

You’ve heard from me on this subject over and over.

It’s time to look at somebody else’s ideas, and then, as is the custom on TRB, analyze and discuss.

Last Wednesday, Globe & Mail columnist Janet McFarland took her turn trying to come up with ways to cool the market.

Here’s her article: “What can governments do to cool Toronto’s housing market?”

I give her credit for coming up with thirteen ideas.

But having said that, I want to analyze each one, because some of these have been bandied about before, and give you my two cents, before I get yours.

The thirteen ideas were proposed at the federal, provincial, and municipal level.

Here are the thirteen ideas, with my thoughts below:

Federal government

1) Create a national housing strategy to co-ordinate with the provinces and municipalities on issues of housing affordability, going beyond the existing strategy on social housing for low-income earners.

This has absolutely no meaning to me.

It sounds like a combination of rhetoric and gibberish.  It’s just words.  And it sounds like it was coming from the mouth of a politician.

Have you ever heard a politician side-step a question?

“We’re currently examining and exploring particular avenues, vis-a-vis different levels of government, in anticipation of gaining momentum in the dialogues that result from various endeavours to find common ground.”

Crap like that.

When I hear “housing strategy,” it reeks of a government official, standing in front of a podium, issuing a memorandum, and ultimately doing absolutely nothing about it.

And what can the government, at the federal level, co-oridinating with the provinces and cities, do about high real estate prices, and supply and demand?

I’m thinking they’re not going to magically cut income taxes in half, so people have more money to buy!

Perhaps there are some other ideas…

2) Raise the portion of profits subject to capital gains tax on sales of non-principal residences to deter speculation and flipping.

I’m not in favour of raising taxes.

Especially when it’s on a profit, that a hard-working, tax-paying citizen made, by sticking his or her neck out and making an investment.

Disagree with that if you want, and I won’t blame you.

But consider that when somebody “flips” a house, they hire and employ dozens of people, for months at a time.

Architects, engineers, plumbers, interior designers, electricians, drywallers, painters, masonrists, brick-layers, landscapers, day-labourers – and the list goes on.

To “deter” flipping, means fewer houses are renovated.

This means fewer people are employed.

It also costs the City of Toronto land transfer tax, GST, and the existing capital gains.

You can’t solve one problem in this equation, without creating another…

3) Increase the first-time home-buyer RRSP deduction above the $25,000 limit, allowing people to withdraw more to fund the down payment on their first home. Also allow “inter-generational RRSP transfers” under the plan, giving parents an efficient way to help with down payments.

I couldn’t possibly agree with this more.

Allow the amount to withdraw from one’s RRSP to be unlimited.

Argue that this only encourages people to take on more debt.

Argue that this puts more money into the market, which creates more buying, and further skews the existing supply-and-demand equation.

But we have to start somewhere, right?

4) Remove the GST paid on municipal development taxes – a tax on a tax, according to the Canadian Home Builders’ Association – to make buying more affordable.


I’m not convinced this would help buyers.

I don’t believe that if the government allowed the developers to pay less tax, that developers would charge less to the buyer.

I think developers would just say “thank you” and take the money and run.

Don’t get me wrong – a federal tax on a municipal tax is laughable!  It’s insanity!

But it’s hardly the most insane tax we have in this country, province, or city.


5) Impose a speculation tax on people who flip houses within a short period, perhaps within two or four years of purchase. The tax could apply to all homes or be limited to non-principal residences.

Would this be instead of the increase in capital gains tax, or in tandem with it?

You can’t have both.

Although I don’t think that would stop Mr. Trudeau and Ms. Wynne from incorporating both, and claiming each had no idea what the other was doing.

The idea of a straight tax on the time period in which a house is owned is ludicrous.

God forbid, somebody gets a new job, loses a job, moves, doesn’t like the area, or has a valid reason for wanting to move!

Can’t you see this playing out during an audit?

A crying couple, sitting with a pencil-pusher at C.R.A., saying, “We both lost our jobs, somebody stole our car, our dog turned into a cat – we just needed a fresh start in a new area!”

Sure, the C.R.A. could make exceptions.  But would they?  And what would the exceptions be?  When would they apply?  At whose discretion?

Let’s say the speculation tax only applies to non principal-residences, then we’re right back to the increased capital gains tax again.

I still fail to see how more taxes equals less buyers and more sellers.

6) Introduce a tax on foreign buyers who buy residential homes in the GTA, similar to the 15-per-cent tax imposed last year in British Columbia.


If you’re going to do one thing, then do this.

This way, 0.00% tax-paying, Canadian residents would be affected.

This would take out of the market those who “don’t deserve” to be in it, and leave the rest of us alone.

When compared to ideas #2 and #5, this is a no-brainer.

Don’t increase taxes on Canadian residents who already pay taxes.  Tax the people who don’t live here, but buy and hold our real estate.

7) Develop a progressive property tax for foreign owners, requiring people who own homes but do not live or work in Canada to pay an annual property tax surcharge.

This would be a great idea if you felt #6 went too far.

This allows foreign ownership, doesn’t penalize sellers by taking buyers out of the market with the punitive tax, and yet still increases tax revenue for the municipality.

This won’t help “cool the market” very much, but it’ll increase taxes for the municipalities.

8) Prohibit foreigners from buying resale homes, except under limited circumstances, to curb speculation, but allow them to buy newly built homes to encourage investment in new housing stock.

Great idea!  That is, if you love idea #6, but don’t want to simply give another tax over to the government.

Restrictions on foreign ownership exist in many countries, but when the topic comes up, people always point to Australia.


-foreign buyers are limited to new homes and condos
-there is a $5,000 fee for foreign buyers to make an offer
-foreign buyers who purchase vacant residential land are required to build on the land within 24 months
-the government can force the sale of homes purchased illegitimately or illegally
-foreign buyers must register their purchase with the Foreign Investment Review Board

If you ask me, this is the best idea of the lot.

It requires more government oversight, and they’ve demonstrated that they’ve clearly dropped the ball over the past two decades, since they have no clue who, from where, owns what.

But if the Canadian government could pull this off, it would be worth considering.

9) Expand rent control rules to cover more homes, helping to moderate rent increases for people who cannot buy.

This is ridiculous.

Rent controls would not help the market.

In fact, I think if people renting new condos could stay in those condos forever, with a modest 1.5% increase in the rent each year, then no rented-units would ever come up for sale on the open market.

This would actually lower inventory levels, and have an adverse effect on the market.

10) Give municipalities a break from high-density development requirements to improve the supply of detached, single-family homes, while also encouraging more innovative housing solutions. Target infrastructure like transit to places where it is most needed to help get land developed.

This makes absolutely no sense.

Maybe in Keswick, or Kenora.

But in Toronto?

Should we force developers to build four detached houses, instead of a 60-storey tower with 300 units?

This point can’t be about Toronto…

Toronto and other municipalities

11) Impose a vacancy tax on homes left unoccupied by the owners, which would be collected by municipalities but would require provincial approval to implement. Vancouver is introducing a vacancy tax this year, set at 1 per cent of the assessed value of the home. It relies on the homeowner to declare whether a house is occupied or not.

Another tax!

Notice a theme here?

Personally, I see no issue with buying a property, and keeping it vacant.

If you can afford to buy a property and keep it vacant, losing the potential rent each month, then you’ve done well for yourself, and I don’t believe in punishing people for being successful.

If you want to target foreign buyers, then target foreign buyers.

Don’t use this end-around about “vacant properties.”

Because personally, I think if a domestic buyer wants to purchase a property, and keep it vacant, then he or she should be able to – so long as they pay the land transfer tax on the purchase, the potential HST on the new-build, the capital gains tax on the sale, and the property tax, each and every year.  Isn’t THAT enough tax?

12) Reduce development charges to make new homes more affordable. Development charges are paid by a builder to the local municipality to fund infrastructure costs like roads and transit, and builders pass along the costs to new home buyers.

Development charges are NOT paid by developers.

Well, I mean, they’re paid by the developer.  But it’s not the developer who actually comes up with the money.

Read your 200-page pre-construction condo agreement.

The developer is simply charging this back to the buyer.

So if you reduced these fees, maybe the developers reduce their prices.

But the government has to make that money up somewhere else.

If the City of Toronto is making, say for example, $300 Million per year in development charges, they have to replace that money somehow.  And it’s not by stopping Rob Ford’s gravy train.  If that tax vanished, a new one would take its place.

13) Fast-track zoning approvals for residential development and streamline other approval times for all stages of projects to help get more housing units constructed.

Fast-track?  Sounds great.

But does this mean developers can do more, faster, with less oversight and regulation?

Because that’s the last thing we need.

They already get away with enough.  People are blindly buying pre-construction condos again.  Only the “VIP” or “Platinum” real estate agents, who have sold their souls to developers, are allowed to represent buyers.  As a result, the buyers have no representation.  But that’s another story.  For every 300 unit condo being built, there are 600 “worksheets” submitted from buyers, who will lay down and let the developer run them over with their car.  But that’s another story too.

I don’t know that “fast-tracking” and “development” should go in the same sentence in downtown Toronto.

Well that’s all I’ve got, folks.

I welcome your thoughts on both the “thirteen points,” as well as my comments.


Written By David Fleming

David Fleming is the author of Toronto Realty Blog, founded in 2007. He combined his passion for writing and real estate to create a space for honest information and two-way communication in a complex and dynamic market. David is a licensed Broker and the Broker of Record for Bosley – Toronto Realty Group

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  1. Paully

    at 7:19 am

    They missed the big one. Shut down CMHC, and demand immediately falls.

    1. BillyO

      at 8:01 am


      1. Geoff

        at 9:24 am

        doesn’t chmc not apply to houses over $1M? didn’t I read that somewhere? With average house in TO over that anyway, don’t see that making the monster difference anyway (at least not in detached houses).

        1. kd

          at 10:31 am

          52% of GTA detached home sales in March were for more than $1 million where mortgage insurance isn’t available. Last month Genworth also told analysts that they expect national volumes to fall up to 25% this year.

          So be careful what you wish for. The combination of soaring prices and tougher qualifying conditions is rapidly transforming mortgage insurance into just another form or regional subsidy and condo incentive. All the rest of us tax paying, home owners are just out of luck.

    2. Appraiser

      at 8:09 am

      Is CMHC responsible for the huge run-up in prices in places like Sudbury and Sarnia (oh wait – that’s not happening).

    3. Joel

      at 9:35 am

      By not having CMHC you are forcing those without high paying jobs or wealthy parents to not be able to own. This will work to exaggerate the wealth gap, which is something that we should try to minimize.

  2. Jack

    at 7:31 am

    It’s always fun to contemplate new laws and regulations. What I don’t see on the list is more resources for enforcing existing laws, such as those about capital gains on non-principal residences and money laundering.

    Transferring some part of mortgage default risk to mortgage issuers would also help.

    And then we have a problem with the disconnect between the official inflation rate as measured by CPI and the inflation in housing prices, with consequence for the Bank of Canada monetary policy. But that’s a difficult problem with no easy solutions. I am sure people at BoC and at finance ministries are thinking about that.

  3. Tina

    at 8:36 am

    I’m sure this will not be easy to track. But what about not allowing foreign buyers purchasing houses under 2 million and condos under 500,000. And if they do they have to pay the 15% tax.
    When we bought our first house we really wanted a new house in North York but that was way out of reach for us. So we made the decision to commute from Richmond Hill. That was 15 years ago. NOTHING HAS CHANGED. If you can’t afford Toronto move out of the city, very simple.

  4. Jackie

    at 9:24 am

    David, I disagree with your comments about the vacancy tax. I am certainly not a socialist but there are larger societal implications when a neighbourhood has a high percentage of vacant homes. There are many studies showing a linkage between crime and vacant homes. How many people would feel comfortable coming home after dark or taking a walk in the evening if 25% of the houses on their street were vacant? Would residents support paying more money to hire police officers to patrol a neighbourhood that’s half empty to decrease crime?
    The other implication is school occupancy and other community services (transportation, hospitals). The city of Toronto is actively looking at closing schools that are under utilized. The demographics show that Toronto has smaller families than those in the GTA, but no government data on vacant homes within a 1km radius of schools to be closed. If the % of vacant homes along a bus increases this can cause ridership to decline. With budget constraints TTC will definitely reduce service on a bus route impacting the people that still live along the route.

  5. aE

    at 9:47 am

    Your liberals in Ontario have screwed up everything they have touched. Like your Hydro rates for instance. If you think they will get this one right with a knee jerk taxation, it’s not going to end well. As a “foreigner”/American, who owns a 1.2 million dollar condo in your city, unfortunately none of your measures would ever make my place “affordable.” Toronto in fact will never be “affordable” again for the working class, without drastic economic consequences to all. So like all American cities that are considered world class, move out and commute. Millions do it daily. But one thing I know for sure is I don’t want to be part of a city and province that looks at foreigners in this light. Better to sell and go buy in New York where foreign investment has always been embraced thus creating a world class city and real estate mecca. Or Miami. You think the “locals” are paying 2000/ft? Your city “earned” over $500 million in land transfer taxes last year. You will never make up that amount when the market turns from this populist, politically motivated market intervention. Toronto still can’t balance it’s budget, cannot build toll roads, cannot find other places to raise more money. Good luck. How about recognizing that new listings have surged 62% from the same period last year. The market will correct itself and stabilize just like Vancouver was right before they instituted the tax. You will not make Toronto proper affordable ever without drastic consequences. And good luck proving a condo is vacant that an owner uses 5 months out of the year. What a joke.

      1. aE

        at 10:09 am

        Yes that was the Obama era. Nothing will come of this. Additionally, no major US cities tax foreigners we embrace foreign investment. Read below, perhaps we here in Florida should penalize all this Canadian money? Or maybe as was suggested in this article, banning purchases to foreigners based on price tiers or only to new construction. I have never heard of such preposterous suggestions. Florida thrives on foreign investment and we like the Canadians down here. Oh yeah- Your gov’t just had a chance to raise interest rates but declined again, furthering its stance from the US rate pate. It’s your government monetary policy driving this primarily.

        Canada: A Top Market for South Florida Real Estate
        Canadian consumers buy the fourth-most South Florida real estate among all foreign countries. The North American nation registered 7 percent of all South Florida international sales last year, according to the 2015 Profile of International Home Buyers in MIAMI Association of REALTORS® Business Areas.
        Among all international buyers, Canadians spend the most on South Florida real estate. About 86 percent of Canadian buyers paid all-cash for South Florida real estate in 2015. Argentina (80 percent), Brazil (75 percent) and Venezuela (74 percent) trailed Canada in cash sales.
        South Florida’s tropical climate is a top draw for Canadians. With an average temperature of 75 Fahrenheit, Miami is the only major “subtropical” city in the continental U.S. In comparison, the average annual temperature in Canada’s capital of Ottawa is 51.62 Fahrenheit.
        February weather shows an even greater disparity between Miami and Canada’s capital city. On March 2, 2016, Miami registered a high of 81 degrees Fahrenheit while Ottawa posted a high of 16 degrees Fahrenheit.
        The disparity in weather is one reason why many retired Canadians purchase second homes in South Florida. Before the winter arrives in Canada, these “snowbirds” relocate to their Miami and Fort Lauderdale homes and live up to six months here. More than a million Canadians over 55 years old have adopted the “snowbird” lifestyle, spending the winter months in Florida.

        1. Condodweller

          at 10:45 am

          You can’t compare foreign ownership in Florida vs Toronto. You don’t exactly have an affordability/availability problem in Florida.

          WRT the cash deals, that simply means that no US bank is willing to lend to a Canadian, and Canadian banks are not willing to lend on homes in a foreign country forcing people to pay cash. Although I believe that’s changing with Canadian banks opening branches in the US.

          1. aE

            at 12:08 pm

            You certainly can and you are dead wrong. Foreign money that flows into Florida creates a very big divide in the working class that serves the tourists/snowbirds. Florida has the 6th least affordable housing in the US. Wages here are some of the lowest in the US, yet housing prices are sky high, home insurance rates are very unaffordable. However, with all that being said, we do not punitively punish outside money coming in here because we understand the value it brings to the economy. An owner like myself in Toronto, pays 8000 in real estate taxes, uses NO services, and spends an average of 15-20 k a year in Toronto. i probably pump more into the economy than an average taxpayer, that’s for sure. Let the market correct itself, or create stricter NATIONAL immigration policies that would’ve prevented someone like me from buying property as well. All I know, is this liberal government is sure to FU-K this up big time. Kathleen Wynne? Tory? This will be historic for sure if they go too far.


          2. Condodweller

            at 12:40 pm

            From your link:
            “In a study released this month by the National Low Income Housing Coalition, the Miami-Fort Lauderdale-West Palm Beach area ranked tenth from the bottom in the supply of affordable housing for extremely low-income residents.”

            A quick google search tells me that SFH prices in Miami area are less than a third of Toronto prices. Factor in lower income taxes in the US and you will find many Torontonians would love to have your “unaffordability problem”. Toronto’s extremely low-income residents are called the homeless. Don’t come here looking for sympathy until only the top 10% can afford to buy a home and when a household with a $200,000/year income can’t qualify for a mortgage on a SFH in the city.

            I looked at investing in Florida RE after the crash and you could buy a nice condo outside the main centres for well under $50,000. Even today you can get a condo for $220,000 in Miami according to this article: https://therealdeal.com/miami/2017/03/22/home-sales-drop-again-in-miami-dade-and-broward-rise-in-palm-beach-in-february-realtors-reports/

            You can’t rent a 1 bedroom condo in Toronto for rent of a house in Florida.

            As for you paying property taxes, it’s not the cities fault that you chose not to live here full time. You say you don’t use the services? Do you get dropped off/picked up in your building with a chopper i.e. not use our roads transit etc. , nor do you turn on your lights or produce any garbage?

            As Albert once said it’s all relative…

          3. Ralph Cramdown

            at 4:41 pm

            Boy, are you two both ever right. Florida IS a low wage economy, and housing IS hard to afford for low or middle income locals.

            But it IS a joke compared to Toronto. I can find new built freehold detached houses in Miami for under $250/sqft, in a district with decent schools and very low crime, done by a national builder whose name I recognise. Trulia recently did an interesting study showing what percentage of listings somebody with a median teacher’s or “first responder’s” income would be able to afford, and in Miami-Dade, teachers could only afford 25%. of them. OMG! Except, here in Toronto, who even looks at what a single income professional or unionized household can afford, except for the 1 bedroom condo segment?

            ‘aE’ points out something important — much of Florida’s real estate market is driven by rich people from outside the state. Says this is a good thing as otherwise, presumably, it’d be more akin to Alabama or Mississippi. I hope not. Florida has developed an economy where the rich and successful speculate in and develop real estate, and the poor service rich visitors from elsewhere. Tourism is a great business in a low wage, low cost of living place, but a crappy one in a (comparatively) high wage, high cost of living place. Florida might not be at the absolute bottom among the 50 states, but nobody, NOBODY, is running an economy and saying “we should be more like Florida.” [Insert Richard Florida joke here].

            If you believe in Florida, Loopnet shows cap rates in the 7-8% range on multi-units at <$100,000/unit, even in good urban areas. Toronto prices, by contrast, are insane on any property below seven digits, and merely stupid above that.

            If you've got a theory that Floridians are naturally stupider and/or lazier than the citizens of California, Massachusetts, Texas or New York, then I guess it makes sense to build an economy around rich people from elsewhere, and have the local-born live on the scraps. Otherwise, other places have shown that there are better options.

    1. Joel

      at 10:17 am

      I agree with what you are saying.I think that we should allow foreigners to purchase. ( I can’t imagine the outrage of our seniors if Florida imposed additional taxes on snowbirds who bought homes there.) I think that this should be countered with higher property taxes for all. Our property taxes are not very high.

      There was an idea that was floating around that property taxes are higher if you don’t pay any income tax in Canada, or don’t declare enough. I think this would be a reasonable way to raise extra funds for the government to use as needed. This wouldn’t be only for foreigners, but also business owners that declare $50,000 a year on their taxes and live in a $3 million home.

      1. Alexander

        at 4:07 pm

        Just another tax grab from Liberals who spend money like there is no tomorrow? Are you living in parallel universe? I AM AFRAID THAT WHAT IT WILL BE ABOUT – JUST GETTING another tax vehicle to fill the empty coffers and show will go on in 6 month’s time.

  6. JDF

    at 9:50 am

    Multiple simultaneous measures need to considered to achieve the objectives of providing affordable options to live in Toronto.

    Agree with the no brainer of #6 – foreign buyers tax similar to Vancouver.

    Laneway housing – the city needs to adopt a reasonable process to permit this- however, this should come with condition of rent control so that the homeowner can weigh the costs vs the return before they proceed. This will help to achieve the objective of bringing additional reasonable housing stock into the city.

    I actually support rent controls overall and I have 6 tenants. The recent gouging of doubling rents in Liberty Village is absurd. It takes advantage of people and looms over every single renter who lives in a unit built post 1991. Moving sucks and its expensive and stressful. The ones who have been burnt will search for units pre-1991 or rush out to buy (with help of their parents – who wants their kids living with that instability) which would exacerbate the demand situation. These are people’s lives and homes – most people lock in their mortgage for 5 years so that they know what their exact payments will be for the at period. We were all renters once in this big city.

    1. Another Mike

      at 11:26 am

      I agree laneway housing should be allowed. The city should also consider relaxing rules for permitted rear extensions on existing houses somewhat, provided the neighbours don’t object. I believe this was done in the UK. Right now, the Committee of Adjustment is preventing lots of homeowners from performing modest rear additions (which would utilize the land at least more efficiently than what is presently there), while at the same time the OMB is letting developers get away with whatever they want.

  7. Kyle

    at 9:56 am

    The real underlying reason for prices being as high as they are is that there is a major supply and demand imbalance. The issue with most of the “solutions” is that they try to bring the supply and demand back in line by creating blockages which fight where the market forces wants to go rather than trying to harness or redirect the market forces. Time and again, the market always wins and Government always fails. If you really want to cool the market you need to apply some economic Jujutsu (i.e. you use the weight of your opponent against him).

    So what can be done:

    1. When prices rise the market naturally wants to build more supply. Government should facilitate this by getting the hell out of the way. Start by relaxing the archaic zoning and glacial approval processes. Right now Developers are the only ones adding new supply of units, meanwhile private home owners are freely buying up multiplexes and remove units (i.e. converting them back to single family usage), but good luck trying to buy a single family and converting it to a duplex or triplex. We are the 4th largest city in North America, but most of our built form is reminiscent of a small town. No wonder rents and prices in this city are sky rocketing.

    2. Why is demand so high in this city and so low in other cities? Simple – clustering. People want/need to live close to where they work. And Toronto is where many of the high paying jobs in this country are. So people pay a massive premium to be in this city. When prices are high market forces usually encourage substitutes or alternatives. Buyers don’t want to pay a premium, they do it because they feel they don’t have an alternative. Rather than trying to hold back the demand through additional taxes and restrictions (which only stifle economic activity and growth) the Government should be seeking to encourage alternatives, like creating an environment where clustering can happen elsewhere beside Toronto or create infrastructure so that people don’t need to live where they work. Create tax incentives for companies to encourage working remotely or in satellite offices in secondary cities. Invest in infrastructure that facilitates living outside of the City, while still being able to work for a big City employer, like better regional transit and better broad band.

    1. daniel

      at 11:19 pm

      Kyle, kyle, kyle, what are you doing bud? This is the internet, it’s no placed for well reasoned suggestions. You’re supposed to come on here to either suggest that the market is going to completely crash and is only elevated because of foreign investment, or to argue that unfettered investment is a natural birthright and that there’s nothing wrong at all. No middle road, no practical solutions, that’s the comment section code of conduct

  8. Joel

    at 10:06 am

    A few things about David’s comments first:

    3) Encouraging parents to give away their retirement to help their kids buy a home is reckless. If they do not have additional cash to help out, then their kids should be on their own. This is only going to drive up prices.

    5) This can easily target those who’s main business is building and flipping houses and not paying tax on it. Allow 2 houses in any 10 year period to have the primary home exemption applied. Flip more houses, or sell more houses and you pay capital gains. People can plan around this and if they lost money they don’t pay any taxes.

    Some ideas that I think would greatly help.

    Eliminate assignment sales. I am a mortgage broker and see significantly more people buying pre-builds with the intention to sell them in assignment rather than to live in or rent them. This is eliminating the demand and causing more and more people to think that they have to buy condos the day they go on sale.

    The city planner/government can regulate what is built by controlling the amount of money that needs to be put down on a house, or when the builder can take funds. If we want to eliminate urban sprawl we can say the builders must have a house 85% completed before they are able to sell it or take any deposit from the buyer. To increase density in zoned areas builders can take a 5% deposit on signing and 5% in 90 days. This gets more people into these products and encourages developers to build these units.

    I think that too many people are using too much leverage when purchasing housing they they wouldn’t be doing in the equities market. A sophisticated investor that has a margin account understands the risks. The average person that depletes their retirement saving to purchase a house only to take a HELOC out on their house once it is appraised in a year at 25% gains does not understand the same risk.

    There are higher risk investment that only qualified buyers can purchase, but anyone can buy a house with 100% leverage if they are using a HELOC from their primary residence.

    1. Condodweller

      at 10:27 am

      “If we want to eliminate urban sprawl we can say the builders must have a house 85% completed before they are able to sell it or take any deposit from the buyer.”

      This is what caused the 89 crash. Builders created a huge supply without selling units preconstruction and when the music stopped prices crashed. You don’t want this. In fact, this is the main reason builders have to pre-sell a building before they are allowed to build.

      1. Joel

        at 11:03 am

        If houses one hour outside of the city are sitting vacant we are not going to see a crash inside the city. It is a different demographic. This would work to reduce sprawl and encourage the higher density development that the government has listed as a priority.

    2. Libertarian

      at 10:46 am

      I agree with you about # 3. Leave RSPs alone! We already have enough demand in this city, we don’t need more of it. People should save for retirement. That’s what a responsible adult does.

      But I’m sure Trudeau (with Wynne’s support) will implement this idea. After all, Wynne led the initiative to raise CPP. When Trudeau won, he implemented it. Trudeau and Wynne are socialists (although, Wynne calls it “activist government”). We’re slowly moving towards a big brother state. They will tax everything in sight and justify it by saying the gov’t will take care of you through expanded social programs (nationalized daycare, affordable housing, pharmacare, etc.) and expanded CPP in retirement.

  9. Condodweller

    at 10:07 am

    Another big one: reduce the cost of moving. Close to $100,000 cost on a million dollar home between RE comission and LTT.

    Let’s run some calculations:

    1. 50 years ago on a $40,000 house you would have paid $2,000 for the commission @5% Present value of that $2,000 after 3% inflation is $7,563. Commission paid on the same house at let’s say $1,000,000 (but easily could be $1,500,000) $50,000. We are paying almost 7 times the amount of commission today adjusted for inflation. That is 661% increase for a 13% annual increase!

    2. Take a look at the graduated LTT grid here: http://www.landtransfertaxcalculator.ca
    Back in the day, let’s call it 1997 to use round numbers, when the average value of a house was $250,000, 1% was deemed to be a fair amount of LTT. You would have paid $2,500 of LTT. If you wanted a luxury home between $250k and $400k you had to pay an extra 0.5% above $250k. If you went with a truely extravagant home over $400k then you had to pay double the base amount at 2%. Plus there was no Toronto LTT at the time.

    Therefore on an average home of $250k you paid a whopping $2,225 LTT. Compare and contrast that with the $32,000 LTT you would pay today on a 1 million home. That $2,225 in today’s $$ at 3% inflation would be $4,018. That is a 796% increase in 20 years for a 40% yearly increase! This is mainly because our government considers, and charges, a luxury tax on every home sold in the GTA!

  10. kd

    at 10:17 am

    Since you asked.

    a) incent businesses and governments to move away from the high demand areas. Not everyone could move, but there’s few reasons a bank call center or provincial government department couldn’t relocate to Timmins or North Bay;

    b) provide short term incentives to list, sell and move out of the city. Today the feds let those moving 40 kms for a job write off all moving expenses including realtor commissions. For the rest of 2017 drop that down to 15 kms and eliminate the new job requirement. If you really want this to work make magic turn it into a cash payment to the Seller due on closing;

    c) add development penalties for long term vacant land holders and sluggish municipal governments. If, say, property taxes were quadrupled for undeveloped land held for 5 years or more and those property taxes were shifted away from municipal coffers to the province, land banking would shrink and slow moving urban governments might get their act together and approve more new builds;

    d) specifically define limited areas of Provincial Interest (e.g. land near subway and GO train stations) and shift formal planning and approval for those tightly defined areas to the provincial level. Leave all other matters to the local or regional governments. This is politically impossible at the moment, but a variation on the theme is almost certain to happen after the next election. So why wait.

    e) make Buyers directly pay their Realtor’s commission. Of course mortgage insurers and lenders would also need to be forced to allow commissions to be added to the mortgage, as they currently do with their own premiums. This would be messy for awhile but longer term should make sale prices more accurate and make Buyers value (or not) the service provided by their Realtor;

    f) eliminate the archaic property bidding system by forcing all buying Realtors to send offers through a third party managed centralized online system. Electric funds transfer could be used to directly move deposits funds to the centrally managed trust deposit facility so that Sellers have deposit certainty on offer night. This system would be easily auditable if designed properly and provide badly needed credibility to our industry. This wouldn’t happen quickly of course, but many other sectors have been doing similar things for decades and we are way behind the curve;

    g) rewrite the Building Code to specifically focus on affordability. They did it for costly green construction so it would be good to have a formal builder requirement to focus on low cost construction;

    h) over-ride all municipal bans and social housing agency restrictions on manufactured homes. More than a quarter of New Brunswick’s houses are manufactured and the U.K. has a major drive to build houses in factories and assemble them on site. We need to do the same;

    i) force lenders and mortgage insurers to include 100% of condo maintenance fees in mortgage applications;

    j) raise Toronto’s property taxes to at least the mid-range of GTA municipalities. Use the excess fees to reduce Toronto’s land transfer tax to encourage people to move;

    k) add a vacant bedroom property tax surcharge to all homes with more bedrooms than residents.

    That’s it for now.

  11. Steve

    at 10:23 am

    The government wants to increase density in the city , then it should align the property taxes. It isn’t fair that a $1m condo is paying similar property taxes vs a $1m detached house . Simple solution : increase property taxes on low density housing in the city . A 5000 sqft lot in the city should pay property taxes based on what that land could generate if it were developed into higher density. Own a detached house in the city ? You should be paying 5 to 10 times times what you’re paying now in property taxes. I know it will never get implemented but if it did, all the inefficient use of land (detached houses in the city) become efficiently used to create additional housing stock .

    1. Another Mike

      at 11:12 am

      The property taxes on a house in Toronto are now about $6k-$10k/yr for a modest 3 bedroom detached or semi-detached houses. Just to be clear, you are proposing that such homeowners should pay $30k to $100k in property taxes per year for most of the houses in Toronto. That would punt all retirees, first-time homebuyers, and young families from their houses pretty quickly. The cascading effects on the city would be pretty extreme. You may as well just fully privatize the TDSB at that point too.

    2. daniel

      at 11:12 pm

      actually steve, this is exactly how the property tax system works. it’s called highest and best use and is the basis of the evaluation. now, given that rezoning a residential lot to a high density use is virtually impossible, this doesn’t result in massive assessments for ground oriented housing, except where it’s located outside an R zone.

  12. Investor

    at 11:06 am

    Govt should introduce a one-time capital gains exemption that would allow investors to sell an investment property and shelter all gains in a TFSA or RRSP. This should bring more housing to market and also help lessen the OAS/CPP deficiency for up coming retirees. Rules could be placed where none of that gain amount can be withdrawn until age 65, or a large with-holding tax of 45% is taken.

    I can see this used for stock investors as well. Wonder if this occurred, if the markets would see a gentle easing or large correction based on the selling of investments.

    1. Ralph Cramdown

      at 11:21 am

      Dude, if I could put the capital gains from an investment property into my TFSA and never have to pay taxes on that money or the growth of it until it passes to my heirs, I’d buy an investment property just to do that. As would a lot of other investors, I’m sure.

  13. H. Marshall

    at 11:25 am

    #9 Extend rent controls.

    Question to Dave. What will expanded rent-controls do to the price of one-bedroom condos in the downtown core? How about new builds?

  14. RLST8isGREAT

    at 11:50 am

    I have a lot to say on this matter however at the moment I am quite distracted by the bulldog on ice pic…can’t deal…like the Chicken Lady from Kids In the Hall I feel I may explode…

  15. Alexa

    at 12:53 pm

    You don’t need to change any laws but how about start enforcing the ones we have. To the extent a person buys a house with the intention of renovating it and selling it (usually easy to determine), tax the gain as if it is business income and look through all these shams of people putting title in the name of their kids, relatives, etc. to avoid paying taxes. Impose third party penalties on anyone (e.g., agents) who knew this was not and never intended to be a primary residence or anything other than a business, or impose gross negligence penalties. All the tools are there for CRA to do this, they just need to start auditing. If you are in the business of renovating (flipping), pay your fair share of taxes and stop hiding under the principal residence exemption or favourable capital gains rate.

    1. Max

      at 2:36 pm

      Usually easy to determine? Pray tell.

      It sounds like many posters would like nothing more than for Canada to become an Orwellian nation of socialist CRA snitches.

      “Hello Stasi? I think my neighbour actually made a profit last year. You should come and look into it.”

      1. Libertarian

        at 3:34 pm

        It’s not about being snitches. It’s about fairness.

        If somebody’s full-time job is flipping houses, shouldn’t that person pay income taxes just as somebody who flips burgers for a living?

        On other hand, if it is only an “investment” for the person, should that person pay taxes just as somebody who invested in stocks, bonds, GICs, ETFs, mutual funds, etc.?

        There are a lot of people out there who agree with Alexa that people are skirting the rules around real estate by making various claims that it’s their primary residence, or their spouse’s, or their kid’s. Canada’s tax laws are very clear, there is a principal residence exemption, but other than that, a person should pay the appropriate taxes on any other real estate transaction. I would go further than Alexa in that the country has changed drastically since the gov’t implemented the PRE and CMHC, so I have no problem with gov’t adapting to the times.

        Is the tax code in Canada messed up with too many loopholes, improper incentives, confusing rules, etc.? Of course it is. But that’s another topic for another day.

        1. Ralph Cramdown

          at 3:52 pm

          Well said. I agree with every paragraph and sentence, unreservedly.

        2. Sevyn

          at 9:02 am

          I agree with David and disagree with Libertarian. Is it my fault you flip burgers for a living? people like David said, that have put their neck out and ‘flipped’ a property – good for them – too bad for you. They got some money some how and decided to do some renos and make a profit. I think the government should stop digging into peoples pockets with the capital gains crap. I am against that – they should remove that altogether. I agree with Juan though – that sounds like a very good rule to implement!

          4. Loans for non Primary Residences: Each person should be allowed to take out residential mortgages on a maximum two properties. Loans for any properties in excess of 2 should require 50% down payment and should be handled as business loans, with applicable interest rates (not residential mortgage rates).

          1. Libertarian

            at 10:42 am

            It’s not about flipping houses vs. flipping burgers. It’s about taxation. If someone wants to invest in real estate, go ahead. But you have to pay the appropriate tax. Either income tax or capital gains tax. If you don’t pay tax, then you are evading taxes, which is a crime in this country. Furthermore, it makes you a punk a$$ thief because you’re not a contributing member to society. You use this country’s resources and infrastructure, but don’t pay your fair share. That makes you worse than Donald Trump, if that’s even possible. He boasted about not paying taxes. Yes, he still won the presidency, but that’s because people hated Hilary Clinton and wanted someone to change the dynamics in Washington. Just like when Rob Ford won here in Toronto. But everyone seems to agree that Donald Trump is a lousy human being.

            If you want to remove capital gains tax, then remove it on everything. Let people invest and trade stocks, bonds, ETFs, mutual funds, art, antiques, cars, hockey card, etc., without paying tax on the gains.

            It’s like Ralph Cramdown’s comment below in response to Max. in that every real estate investor thinks they’re “the smartest guy in the room” and figured out how to live tax free and the rest of us are idiots. Newsflash – you didn’t. You’re just committing the crime of tax evasion and mooching off of society.

      2. Jack

        at 4:03 pm

        In that hotbed of socialism, good old USA, you must own your principal residence a specified minimum length of time before you sell it, if you want to avoid paying capital gains tax on the proceeds.

        1. Max

          at 4:41 pm

          And what is the specified minimum length of time in Canada?


          “Usually easy to determine” is not an answer.

          1. Ralph Cramdown

            at 5:11 pm

            Is there an actual use case you’re trying to defend here?

            Here’s how I see your argument:

            Somebody buys a house, “for the long term, as a place for my family to live.” After a brief period, circumstances somehow change, and the home needs to be sold, at 20% above what it was bought for.

            You don’t want to pay capital gains tax, because you weren’t intending to risk capital in hopes of a profit, but just buying a place to live.

            You CERTAINLY don’t want to pay income tax, because this wasn’t something you do for a living.

            So you made a big profit, totally unplanned and accidental, and your fellow taxpayers aren’t entitled to any of it because…
            You weren’t planning on making a profit, and weren’t planning on risking capital to do so, but you got SOOOO lucky, and your fellow taxpayers are SUUUUUCH idiots, that you think this bullshit will work?

          2. Alexa

            at 5:17 pm

            You can get records of how many houses the person and his/her relatives have bought and sold in a certain period of time. Check MLS descriptions/pictures. And it is easy to tell if a newly renovated house has been lived in or not. What is utility usage, have kids, if any, been enrolled in local school, did people change their drivers license address, was cable or internet set up, etc. etc. I’ve been in countless “flips” that have obviously never been lived in. The lifecycle is cookie cutter – “attention renovators” house sells, get fixed up, and then immediately is back on the market. It’s not rocket science.

          3. Jack

            at 5:25 pm

            Answer to: “And what is the specified minimum length of time in Canada?”

            There is no such specified minimum. But if CRA decides to question whether you are entitled to the capital gains exemption on what you claim was your principal residence, they may consider the length of ownership as one of the factors.

  16. Edwin

    at 1:10 pm

    Seeing as this blog was written by a realtor I’m going to assume the correct course of action would be whatever measure he disagreed with.

    1. Ronie

      at 6:00 pm

      Awesome Edwin! Can’t agree more. This situation is a built up of my real estate friends and sooner we ALL realize that, better it is!

    2. Boris

      at 12:03 pm

      Thats intelligent.

      You silly dink.

  17. Juan

    at 1:19 pm

    Here is my list of my suggestions…

    1. Foreign Buyers Tax: It should probably be higher than 15% but at this point we have to match Vancouver in order to not create an im-balance of foreign money between the cities.

    2. Ownership Reporting: In tandem with #1 above, the government needs to implement a clear reporting procedure for the owners of all properties. Ownership should have to be reported (and substantiated) each year at the time property taxes are renewed. If the owner is not disclosed properly there should be a fine imposed on top of the property taxes.

    3. Ownership Continued: Primary residences should not be allowed to be owned by corporations.

    4. Loans for non Primary Residences: Each person should be allowed to take out residential mortgages on a maximum two properties. Loans for any properties in excess of 2 should require 50% down payment and should be handled as business loans, with applicable interest rates (not residential mortgage rates).

  18. kramer

    at 1:36 pm

    This all depends on the root cause of the hot market.

    If root cause is speculative, then the last thing you should do is boost supply. One reason (NOT the main reason) the bubble got so DANGEROUS in the USA is that supply was endless, developers could keep building and building and building. In a speculation driven bubble, more supply only feeds the beast. This helped make their crash so much more horrible. This contributed to their bubble having incredibly thin skin.

    You could say our bubble (if it is that) has thicker skin because we haven’t been able to build build build. If our bubble is speculative, then our inability to build build build single family homes has sheltered us from additional ugliness in any aftermath.

    If the root cause is NOT speculative, but rather the root cause is real supply/demand issues caused by population growth and low interest rates front-loading sales causing a bottle neck of buyers that will start clearing up when rates start ticking up, then THE ONLY thing you can do NOW is build build build and wait for a interest rate-based when rates go up.

    Must have undeniable data/analysis telling us this is NOT speculative before we turn to building more and more. If this is speculative, building more and more will harden the landing big time.

      1. Kramer

        at 11:12 pm

        Then we shouldn’t increase supply via building more… will just be adding wood to the fire.

        Let interest rates take care of it in due course.

        In the meantime, people looking for single family houses should start trailblazing in many more of the ‘less desirable’ neighbourhoods. Newsflash, there’s not enough houses in Leslieville and the Beaches for everyone in this city, with speculation or without.

  19. Natrx

    at 8:52 pm

    I can see in some areas of the market, it’s already slowing down in terms of prices which were set when a lot lower # of properties were listed. Now with supply way up, the top end of the demand curve that set those record prices, are still there, but now, the lower end of the demand curve is now met with the increased supply. Alot more ‘relistings’ at real Market value (the minimum price they’ll accept) is occurring. And even some cases of ‘accepting bids at any time’ type situations.

    There are still areas and pockets where it’s super hot, given the real lack of supply, but more and more, there are increased supply which just doesn’t have enough buyers at the price set last month.

    1. Kramer

      at 11:15 pm

      I understand what you are seeing, but this is probably still way less listings than a full blown Spring Market of the past. And there is a bottleneck of buyers waiting to get into the market. Everything will sell, maybe just take some sort of normal amount of time. Look out for early summer when there is still a bottle neck of buyers and listings have dried up.

    1. Ralph Cramdown

      at 12:00 pm

      With respect, the article you linked says Brooklyn has 2 1/2 months of inventory, but Toronto has recently been running at less than one month. Call us when you’ve got a real bubble.

      Also, if you want to be the expert on US real estate here, we’d like to know what’s up with 666 5th Ave. in Manhattan. We understand it’s probably going into foreclosure, even though leasing space there might curry favour with POTUS given it is partially owned by his son in law? Sad!

      1. aE

        at 12:37 pm

        2.5 months, 1 month. Same deal. Both very low and very quick to turnaround. I want the best for Toronto’s market. I believe it’s a city that has the potential of San Fransisco over the next decade. New York is pushing it-nothing will ever come close to New York. I bought in Toronto because I enjoy your country. You can call me an investor, but my family spends a lot of money in Toronto, and contributes to your economy. Much more than your average citizen does. And my family probably spends more money in your economy than your average tax payer pays taxes. If the city chooses to punitively tax a “vacant home” like mine 1% more, there will be ways around it. How is a home that is used 5 months out of the year vacant? A home that pays its property taxes but sends no kids to schools, drives no cars on the roads, etc.. I rather spend that 12k in your restaurants and stores, than giving it to your city government that will certainly misuse the money while providing no direct economic benefit over giving that money to waiters, restaurant owners, store owners, grocery stores, etc.

        As far as the 666 building goes, as of two days ago Tornado said it’s willing to sell. It’s a convoluted commercial issue with long term tenants and way too much debt.

        All I know is liberal governments are great at screwing up free markets, and if any of you truly believe Wynne, Sousa and Tory will get this right without causing a catastrophe, you are dreaming. If foreigners made up 10% of your total buyers, and let’s say 50% of new condo reconstruction buyers, you think the trolls who have no money are going to come in and finally buy? It’s not going to happen. Real estate is a privilege, and the privileged live where they choose to live. In the US 50% of the population doesn’t pay taxes. They always vote democrat and want a handout. And like here, you have half of your city wanting to tax foreigners, tax vacant homes, increase capital gains taxes on investor homes, because they don’t care and it won’t ever affect them. Unfortunately, that bottom tier of folks aren’t going to swoop in and buy when the tide turns. Wealthy investors will, again at your city’s expense.

        High prices will solve your crisis, and it feels like it is reaching a peak anyway given the 62% surge in new listings over last year at this time. But everyone wants a scapegoat, and politicians love to place the blame on foreigners because our money is purportedly dirty. That’s simply not the case. Have you seen the trade imbalance China has with the US? Lots of folks are getting rich in China and the money is coming back West. It’s is just the global cycle we are in and the Chinese are trying to halt it. Vancouver’s foreign tax did nothing to solve high prices-it just cut down transactional volume. When that happens in Toronto, Tory and the province will be scurrying to search for several hundred million dollars of transfer tax money that suddenly disappeared. And guess where the easiest place he will find it like every big city mayor does. Everyone’s property taxes will go up, and be justified by saying-“we stopped the foreigners and tempered the markets, but our real estate taxes have been the lowest in Ontario for while. In order to maintain Toronto as a world class city, we are raising property taxes 10% this year, to ‘harmonize” with the rest of Ontario.” Mark my words, these governments are so bad at managing anything. They couldn’t even properly withdraw RE taxes this year without double withdrawing thousands of accounts. What mess this will be.

        1. Jack

          at 2:50 pm

          “But everyone wants a scapegoat, …” — yeah, but we don’t do that, we just blame the government.

        2. kramer

          at 2:58 pm

          I would not consider you a “foreigner” or “investor” in the demonic sense they are thrown around these days. Happy to have you here 5 months of the year, wish it was more!

          I believe this is years of imbalanced supply/demand bottlenecking demand in a massive way and finally pushing Toronto home prices up to their medium-term ‘potential’ over a very short-term period. This is how these prices are possible without ‘fundamentals’ backing it up as the figureheads are saying. I agree with you in that prices will sort things out, assisted by interest rates over time.

          1. kramer

            at 3:01 pm

            Disclaimer, I never throw “foreigner” around in a demonic sense nor do I advocate others doing so. Doing so is archaic as well as hypocritical.

          2. kramer

            at 3:17 pm

            And horrible in every way. Shame on you if you do.

            Have a good long weekend all!

        3. Kyle

          at 4:31 pm

          Many people will bristle at this, but i think Toronto should be embracing and courting foreign buyers.

          Toronto is a Global city. It is the free flow of goods, talent and capital through Toronto into the Global economy, which has elevated Toronto to this status, which means its people get to enjoy all those Global City benefits: lots of good jobs, culture, sports teams, amenities, good schools, good hospitals, infrastructure, services, good selection of everything, etc. If we want to continue to be a Global City and continue enjoying those benefits, then this local vs foreign parochialism and tribal mentality is counterproductive.

          Being a Global City means high real estate prices – full stop. And some “locals” may not be able to compete and may never be able to own a home in this City. Yes this sucks for them. But if we want to lower real estate prices in order to keep the dream of home ownership alive for these few, than we need to understand that we do so at the expense of these Global City benefits for all.

          1. kramer

            at 4:51 pm

            Agreed 100%.

          2. aE

            at 11:13 pm

            Very well said. Foreigners start businesses in other countries by having access and create jobs as well. This of all the multinational corporations that do this. And they pay Canadian taxes as well. How many Canadian companies, like American ones skirt paying their own country taxes? Ireland, Holland-all tax havens for US companies. Trillions held offshore. Let the foreigners come and invest and spend money. Unfortunately world class cities are just never cheap, but that is what makes them great. Unless you want to be another Detroit or Baltimore. You can pick up houses for cheap. But who wants to live there? Lots of people want to live in Toronto apparently. And invest money into it. That’s a really nice thing.

          3. Ralph Cramdown

            at 11:02 am

            There’s few things more parochial
            than the local guy
            who claims that the home prices
            will grow to the sky
            They had him in Dublin,
            and Tokyo too
            both of them smashed,
            to cries of boo hoo
            and even Knight Frank,
            in “Global Cities 2017”
            sounds more cautious than you.

          4. Kyle

            at 2:34 pm

            That is great poetry Ralph. Wonderful pentameter and melancholy tone, but…

            There is a reason Fortune 500 companies are building stuff like this in Toronto:


            In my view this is abosultely phenomonal for the city! This is what being an open Global City is about. This is what happens when a city is open to the free flow of goods, talent, knowledge and capital (both foreign or local).

            …But yeah all those new jobs probably aren’t helpful for cooling real estate prices. So i can see why it’s got you writing sad poetry.

          5. Ralph Cramdown

            at 9:58 am

            Kyle, all that stuff is great. It’s super that those jobs are coming to Toronto. But if you look at the world’s top, say, 200 cities, they’re all putting out press releases like that. Cisco with 19 or so innovation centers, GM with 7 or so, IBM with around 25. And while each of these initiatives may create up to a few hundred great, high paying jobs, there’s not much of a multiplier. You need some HR, cleaning staff, support staff and security. Contrast to an auto assembly plant, where the multiplier of nearby parts suppliers, logistics and infrastructure is huge.

            And lastly, the bad news. The demographics of our ageing population, and the fact that we haven’t figured out how to automate dementia care or personal care in home and in nursing facilities points to: A lot of the new jobs in the next 20 years are going to be $12/hour personal support workers. There won’t be a lot of press releases celebrating that.

          6. Kyle

            at 2:44 pm

            I disagree with your analysis. The GM project alone adds an estimated 3000 jobs, not just a few hundred. But lets also not forget that the building of these campuses and hubs, each costing several hundred million, adds construction jobs, architect jobs, design jobs, engineering jobs, financing jobs, etc. And my list is no where near comprehensive, it is 30 seconds of googling “innovation + hub + toronto”

            The real point is that these types of hubs are only being built in select Global Cities. Yes Toronto may not be the only City, but if you look at the other cities where these are being built they too have sky high real estate relative to local incomes. Such is the reality of being a Global City. And the other point i want to make is that these aren’t just small regional branches or offices of some large organization, meant to execute the companies strategy and operations in a new market. While, there are a tonne of those too in Toronto and they too contribute lots of high paying jobs. These hubs are a bit different, they’re meant to be the brains that see into the future and drive the strategy and direction of those organizations (i.e. the real high paying jobs).

            And finally it is the right tail of the income distribution (i.e. the high paying jobs) that determine real estate prices, not the $12/hour segment of the income distribution. The left tail doesn’t transact in real estate, so whether we have half as many or twice as many $12/hour jobs, it really has no impact on sales prices. Whereas adding 10,000 high paying jobs to the right tail, when there are usually less than 120,000 sales in the GTA each year IS going to have an impact on real estate prices.

        4. Alexander

          at 10:51 pm

          Hear, hear ! Nobody talks about costs to BC coffers because of foreigner tax , but 40% annual slump in sales is not easy to ignore for their accountants. People do not care at the moment because it is not their money, but when taxes are going up they will notice.

          1. Kyle

            at 5:04 pm


            In BC the foreign buyer tax has done nothing for affordability, but it has drastically reduced the number of sales and the land transfer tax revenues associated with those lost sales. If the sane thing happened in Toronto, both Ontario and Toronto would have huge gaping holes in their budget that they would need to fill, which will then need to be made up by increasing property taxes.

  20. Boris

    at 12:03 pm

    the best solution for high prices is high prices.

    Let it work itself out.

  21. Max

    at 1:04 pm

    Go to any open house this weekend in High Park, Roncy, The Junction, The Annex, Bloordale, or Parkdale. And ask all the WASPy young couples with mom’s chequebook burning a hole in their pocket whether they consider themselves foreign buyers. You might be surprised that they don’t.

    1. O

      at 2:32 pm

      My experience as well in my neighborhood. All recent buyers have been young local couples in their 20’s getting massive help from wealthy parents.

      1. Scott

        at 1:09 pm

        Or perhaps they’re educated professionals who work in the core and both make over $100k per year?

  22. Vancouverite

    at 8:21 pm

    Hey David, I have to call bias on your objection to the capital gains tax. While your points are valid, I think you’re hiding the fact you probably own investment properties and therefore you’d be directly impacted by the increase of capital gains. I usually like what you have to say, but please be forthcoming with the truth. I would hurt your bottom line on your personal income taxes. Pity you think that investors like you should be given precedence over those people just wanting to purchase their first, and only, home.

    1. Jason

      at 9:43 am

      I strongly disagree with your statement! I am an investor and contrary to what many people think investors are not the problem. We take a great deal of risk investing in new projects and putting our money on the line only to have governments potentially change the rules when we’ve made long-term decisions based on existing conditions. If there was a change to the capital gains tax or rent control, I wouldn’t invest in any market and that would hurt future supply. I agree that 30% annual price increases is absurd, but punishing investors because of it is not appropriate. People should not be afforded the ‘right’ to live in downtown Toronto just because they want to.

      1. Ralph Cramdown

        at 1:49 pm

        Gosh, don’t leave! It would be horrible if the next crop of developers like Stanton Renaissance, Urbancorp, Talon International and half of the developers funded by Fortress couldn’t get their projects funded and pre-sold.

        Actually, you know what? It looks to me like investors have been a little too sanguine about investing with anybody with a cheap suit and a term sheet. Usually the corpses don’t start floating to the top until after the bust…

        1. Jason

          at 4:07 pm

          Do you just post comments to try and validate your absurd opinions?! You’re always negative and always have an axe to grind! You’re right…woe is you! All your problems are someone else’s fault! Life is hard! Put on your big boy pants and take some responsibility for your own actions or lack of action.

          To assume that all investors are investing in cheap condos waiting to assign them for a profit is completely inaccurate. But don’t let facts get in the way of your rhetoric! I feel bad that you’re unhappy! Maybe a handout from the government will make you feel better? I’m sure you’re not one of the hordes of people that have been calling for the bust for the last 7-8 years? Of course not, YOU know better!

          1. Ralph Cramdown

            at 5:02 pm

            Pro tip: As soon as you admit that your investment strategy is to “take a great deal of risk,” successful investors write you off as a lightweight. If you were offended that I didn’t guess which particular part of the industry you’re going to be the bagholder in, I’m sorry.

          2. Jason

            at 6:11 pm

            Here’s a piece of advice for you! When you start a sentence with pro tip, I’ll know to disregard everything afterwards since you’re the furthest thing from a professional! You’re the typical anonymous poster on the internet that thinks they know everything and actually know very little. Good insults though…consider me burned!

  23. Su Vernten

    at 7:15 am

    They simply need to stop artificially boosting the market with cheap loans. Just shut down the CMHC. Job done.

  24. Alexa

    at 1:25 pm

    Stop real estate agents from setting artificially low listing prices to stir up interest. This is misleading and unethical. It brings too many bidders to the table who have no hope in ever being the successful buyer because the seller will never sell at that price, only resulting in a higher sale price because the real potential buyers get scared by all the bids. When a house doesn’t sell and you see the house re-listed at $300,000 over the original list, something is wrong.

  25. Jonnathan

    at 2:22 am

    Hey David,

    Have you been successful in your journey to find a home for your family?

  26. AK

    at 3:55 pm

    If you don’t believe in a capital gains tax for flippers, then I shouldn’t have to pay a capital gains tax on my equity investments either. And people shouldn’t have to pay a capital gains tax when their bonds or other investments increase in value either.

    In fact, those who are “flipping” equities, ie day traders, don’t even get to pay the capital gains tax! Their gains are taxed fully as income!! Houses get that blanket no-capital gains tax exception, but clearly it was designed for those people who bought a home, lived in it for a while, and due to growth and inflation the value went up, so why nail them with taxes? But it certainly wasn’t designed for the flipper who marks it as his “principal residence” for 3 months then puts it right back on the market.

    I’m all in favour of lower taxes, but I’m saying the way capital gains taxes on house flippers are treated now, they are treated far better than anyone else who invests in a stock, a corner store, a lemonaid stand, or anything else. It’s not really fair, and its probably encouraging over investment in real estate versus other sectors. Ditch capital gains taxes for all, or add it to house flippers as well. Either way is fine with me.

  27. AK

    at 4:12 pm

    Also, I get the quotations around “deserve” and why commenters around here use it so derisively. And they aren’t totally wrong. BUT…

    Prices went up. Some people can’t afford it. Other’s can. Too bad. There’s no such thing as “deserve” in free markets. But the problem is how unfree our real estate markets really are. They are distorted left and right through government policies. And the fact is people *DO* think they *DESERVE* to live in a huge detached home, any pay nothing for the privilege of doing so.

    Are those people being unrealistic and unreasonable? Yes. Will politicians nonetheless aggressively respond to their concerns? Also yes. So along will come the government to distort the market another way, to make this dream possible. Eg. I’d be shocked if the Greenbelt / Places to Grow Act survived in its current form for 10 more years – and there you go, more land, more low density supply. Have at it, developers. And likely other modifications and distortions to our market too. It might not be right (or maybe it is right?) but it doesn’t matter. We live in a democracy full of people who think they deserve to live where they think they deserve to live, and they will vote accordingly. The steady boil of 5-10% a year in increases (which is already HUGE) and not as many people freak out, but when you go parabolic like Toronto has in the last year, I can’t imagine the government not responding in some way that will do all sorts of distorting things to the market. There will be winners, there will be losers, and I guess it’ll take a few years to figure out where we will all fall. And yes, it will all be because people “deserve” the home of their dreams. Stop saying it so derisively and get used to it.

  28. Mike

    at 5:49 pm

    > If you can afford to buy a property and keep it vacant, losing the potential rent each month, then you’ve done well for yourself, and I don’t believe in punishing people for being successful.

    But…no. Markets exist to promote the happiness and well-being of society, and the interest of society is in maximizing the number of families in appropriately-sized homes.

    There’s something *very* wrong when the market encourages scores of people to buy properties and keep them vacant rather than those properties going to families who would make productive use of the space. Surely we don’t go to all the trouble of building living spaces only to keep them empty!

    Disagree about the how the market needs to be tweaked, sure. But the idea that there’s something wrong with disincentivizing vacant homes is crazy; minimal vacancy should be the goal.

  29. Anonymous

    at 11:11 am

    1. I agree with not having a capital gains tax on real estate ONLY if all other investments have this exemption as well. This advantage that real estate has leads to more money going into real estate which leads to bubbles and speculation.

    2. “If you can afford to buy a property and keep it vacant, losing the potential rent each month, then you’ve done well for yourself, and I don’t believe in punishing people for being successful.”

    Do you think a lot of people can afford real estate? You must have forgotten about the 2008 US bubble. A stripper had 5 properties but could she afford them? No! Because of lax lending rules, anyone can afford a mortgage. You think its any different here? Anyone here in Canada can also get approved, regardless of whether or not they have the ability to pay it off or not.

    3. Foreign Tax?
    BTW, foreign buyers represent probably less than 5% of the buyers. Purchases are done mostly by local Canadians. This tax is just a small needle prick to pop the bubble. Its more of a psychological strategy and finding a way to place blame on foreigners to justify our own actions.

    4. Of course you would agree with the unlimited RRSP home buyer’s plan. That will lead to more money into the real estate market pushing prices higher and inflating the bubble even more.

    5. Speculation Tax
    You raised a good point. What if a couple loses their job and has to relocate. Well, don’t buy a place in the first place. If job security is an issue, then rent instead. I have friends that have a one year contract, say in Mississauga. They go and buy a place in Sauga instead of renting. Lots of costs involved in ownership.

    I’m surprised some of the people in the comment section aren’t completely brainwashed by one-sided and biased real estate blogs and that there are actually rational comments. Humanity still has hope.

  30. lui

    at 5:13 pm

    I definitely do not agree on more taxes.First lets identify how much property is owned by foreign buyers,second see how many empty units are owned by foreign buyers,third rent increases should reflect rate of inflation.

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