TORONTO – Ontario Premier Kathleen Wynne says her government’s plan to help first-time home buyers get into the red-hot Toronto housing market consists of “minor adjustments,” not a major change.
The provincial Liberal government had said it would announce the strategy next week, but Wynne downplayed expectations Tuesday of broader action to address soaring home prices in the Greater Toronto Area.
There were a record 9,768 properties sold in the GTA last month — up 11.5 per cent year-over-year— while prices jumped 21 per cent in the same period to an average of $762,975.
“What we’ll be announcing in the fall economic statement on Monday is a small change that will help first-time home buyers, so I don’t think that anyone should expect a radical shift in the way the housing market works in Ontario,” Wynne said.
The main problem for people trying to get into the GTA housing market is saving a big enough down payment, she added.
“Our concern has been that there is a real challenge for first-time home buyers to get into the market, so if we can make some small adjustments, that will help on that,” Wynne said. “We don’t have all of the data that would give us the information we need to make larger changes.”
Wynne insisted Ontario will not follow British Columbia’s lead with a tax on foreign buyers, noting that Vancouver is a totally different market than Toronto.
“We’re certainly not going down the road that Vancouver has gone down,” she said. “But we’ll continue to talk about whether there’s more we need to do.”
Home sales in Vancouver began to dip before a 15 per cent tax on foreign buyers was introduced in August, but those declines have accelerated since, plunging nearly 39 per cent last month compared with October 2015.
Toronto Mayor John Tory said he and Wynne both faced pressure to impose a tax on foreign buyers in the city.
“The fact is it’s a different market, and the premier and I have both tried to take a consistent position that we will look at the facts — a lot of which we haven’t been collecting on what is a very volatile market — so we can make a decision that is appropriate for Ontario and for Toronto,” said Tory.
“As some of those first-time home buyers can move into the market more easily, that will free up rental accommodation, so it all helps with what is a very difficult situation.”
The Ontario Real Estate Association has asked the government to expand a rebate program that provides first-time buyers with $2,000 back on the provincial land transfer tax and up to $3,725 on the Toronto land transfer tax.
The association wants to see first-time buyers totally exempted from the land transfer tax, which rises from half-a-per cent on the first $55,000 of a purchase price to two per cent for everything above $400,000. The city of Toronto’s land transfer tax is one per cent on the first $55,000 and two per cent on the rest.