The Ontario government’s introduction of its new housing policies last week has led to both applause and consternation from a wide swathe of market observers, attesting to the immediate impact of the long-awaited changes.
The implementation of the 15-per-cent non-resident speculation tax drew the most polarized reactions, especially since it’s intended to stifle the GTA market’s price growth (which went up by as much as 33 per cent year-over-year in March).
“It’s a step in the right direction,” CIBC World Markets deputy chief economist Benjamin Tal said, as quoted by the Financial Post. “We estimate that the share of foreign buyers in the GTA is notably lower than in Vancouver.”
However, Urbanation Inc. senior vice president Shaun Hildebrand argued that the tax likely won’t matter much to those who are determined enough to invest in the GTA market.
“If you are a foreign buyer with no connection to the region, you must have a pretty big motivation to move that money here,” Hildebrand stated.
The expansion of rent control to all private rental units in Ontario, including those that were built after 1991, also garnered strong words from the development sector.
“While FRPO shares the government's interest in protecting Ontario’s renters, today’s decision to make changes to rent control legislation, including a proposed roll-back of the 1991 Exemption, was made without formal consultation with the very industry directly responsible for the development and operation of rental housing,” the Federation of Rental-housing Providers of Ontario said in its statement.
“The announcement by the Wynne government will put thousands of units, and millions of dollars in provincial revenues at risk. It is a rash, politically motivated decision, which will hurt, not help generations of Ontario renters,” FRPO president and CEO Jim Murphy explained.
Conference Board of Canada chief economist Craig Alexander said that the rent control provision might have an unintended and undesirable effect.
“While it will be favourable for renters that get rent-controlled properties, such action incents builders to shift away from constructing new rental projects,” according to Alexander.
Other industry reactions to Ontario’s Fair Housing Plan can be viewed in full here
Poll: Broker sentiment on Ontario’s new housing plan
FRPO expresses dismay and disappointment over Ontario’s new measures