I Still Want to Buy a Home! Will the Fair Housing Plan Help?
After weeks, actually months, of buzz about the Provincial government stepping in to “cool” our current housing craze, it finally came down on Thursday (April 20th). Ontario’s Premier started the press conference by stating, “we know we have a problem.”
The live conference was held in Toronto’s trendy Liberty Village district (just steps from North Group's office!) Kathleen Wynne proceeded, along with Housing Minister, Bill Morneau, to reveal a 16-point plan to cool the housing market of the Greater Toronto Area plus the Greater Golden Horseshoe including east from Peterborough, north to Barrie, west to Waterloo and down through Hamilton to Niagara (to the US border).
The government is deeming this solution “Ontario’s Fair Housing Plan”. But at the end of the day, what does this actually mean for you – or me – as a GTA resident? As a tenant? Or as a potential home buyer or even seller? What do these new regulations (most of which will have to pass through the red tape of legislation to even get implemented) do for me, as it relates to our overheated real estate market and the affordability of buying or leasing a place to simply call “home?”
In the short term, not a whole lot, unfortunately. We know that’s not what you wanted to hear. In the long run, some parts of the plan will help regulate housing affordability, however, the implementation of these changes is expected to take time. How long? It’s unclear.
Despite your news apps and social media feeds blowing up with commentary on this topic, you might still have these unanswered questions:
Could the NRST (Non-Resident Speculation Tax) cool the market?
We don’t think it will(at least not dramatically). In our opinion, the buyers that are driving the momentum behind the bidding war craze and vastly overpaying for properties are not foreign buyers. It’s Torontonians. It’s their families. The large-sum gifted down payments. It’s FOMO (fear of missing out). The NRST is not going to change that.
I’m a tenant! Will the rent control changes benefit me?
Effective today, annual rent increase for an existing tenant can be no higher than the rate of inflation. Rent increases will be capped at 2.5%, even if the rate of inflation is higher. This is really good news for renters today, but is THAT what is going to stop the current frenzy in our market? Not likely.
At the end of the day, we appreciate the Ontario government getting involved to try and cool our real estate market that has captured the world’s attention. They’ve introduced a variety of changes that they plan to implement but ultimately, we feel that they will have a nominal impact on our market. At least for today.
We still think it’s a good time to buy real estate . More importantly, buy the right properties for the right price. Yes, that can happen! Even in today’s market craziness. Even still, it’s never been a better time to sell.
If you decide to get take the plunge and enter the Toronto - or GTA - housing market right now, promise us you’ll interview your real estate agent or team. Now more than ever, it is important to make sure you have the best representation and experience supporting your plans.