The impact of housing policies on sales activity will make itself felt upon the economy, according to the Toronto Real Estate Board
Earlier this week, TREB announced the results of its latest study that culled consumer polling data from Ipsos Public Affairs and findings from a recent economic impact analysis completed by Altus Group.
The release of the study came in the wake of a successful Toronto Summit and release of TREB’s third annual “Market Year in Review & Outlook Report” at the end of January.
TREB warned that the existing policy climate puts at risk billions of dollars of economic activity, considering that every transaction in the GTA leads to an additional $68,275 in spin-off expenditures (per Altus Group estimates).
“The psychological impact of the Ontario Fair Housing Plan, as well as the OSFI-mandated stress test on mortgages, have made a dent on the demand for ownership housing in the first quarter of 2018,” TREB said in its news release.
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“[However], these impacts are expected to be temporary. Home sales are expected to increase relative to 2017 in the second half of 2018, as home buyers come to terms with the various government policy changes pointed at the housing market,” the Board noted.
“The fundamentals underlying the demand for ownership housing will remain sound in 2018. Population growth will continue to be driven by immigration and job growth and will be sustained across a diversity of economic sectors,” according to Jason Mercer, TREB Director of Market Analysis and Service Channels. “However, we must be cognizant of the fact that, in the short term, higher borrowing costs and the effects of federal and provincial policy decisions will act as a drag on demand for ownership housing, particularly in the first half of 2018.”
“As we move toward a provincial election, TREB encourages all candidates to make their housing policy direction clear so that it may be debated. It will be especially important to hear policy directions related to the supply of housing in the GTA – an issue which has yet to be addressed with any concrete policy moves from any level of government,” TREB President Tim Syrianos added.