Creating a new supply of homes is the key to cooling down Toronto’s red hot real estate market, says the head of Ontario’s Real Estate Association.
Tim Hudak, CEO of the group which represents 70,000 brokers and salesmen, is calling on the province to establish a task force to examine the issue of home affordability in the GTA. OREA says cutting red tape around new home construction will help alleviate the problem of a lack of supply in the super-hot the market.
“Over time there have been provincial and municipal policies that were well-intentioned at the start, but have combined to put a strangle-hold on the construction of new housing,” said Hudak. “As a result, we have fewer new homes being built today than 20 years ago.”
Hudak, former Ontario Progressive Conservative leader, said the OREA and the Ontario Home Builders’ Association would like to see the province get more actively involved in the issue.
“You can have housing prices be bid up so the next generation can’t afford a home, or you can increase housing supply to give more choices in the marketplace,” he said.
Year-over-year statistics show the average home price in the GTA jumped by 27.7%. The price of an average detached home in Toronto is now $1.5 million.
Hudak said the task force could examine interventions that would help the market and look at rules and restrictions which currently prevent builders from creating new housing of all kinds. The current “one-size-fits-all” approach from the province, which prefers high density development, isn’t working, he said.
“Trying to put the footprint of Yonge and Bloor all across the GTA is causing major problems,” he insisted.
Finance Minister Charles Sousa has hinted that the province may be open to intervening in the GTA housing market.
“A year ago I was thinking, ‘Let market forces prevail,’” Sousa said. “But now I’m concerned about … the ability of people to enter the marketplace.”
A foreign buyers tax is one measure Sousa said is on the table. Hudak is not in favour of that, saying it’s likely to have little impact on the market.
— With files from The Canadian Press.
sjeffords@postmedia.com