As home prices rise, a group of Toronto realtors say governments should focus economic recovery plans on housing supply — and be careful of stoking too much demand.
The Toronto Regional Real Estate Board says many people are going forward with their plans to buy homes, even amid the COVID-19 pandemic and recovery.
As the economy swings up, that could lead to housing price inflation, TRREB's report to lawmakers said.
Even though the number of home sales fell during the pandemic, prices were stable because buyers and sellers pulled back in equal measure, TRREB estimated. If listings lag, it could crunch supply, said TRREB, assuming that the spread of COVID-19 continues to be contained.
"TRREB expects that consumer confidence will improve, as people gradually return to work, and a growing number of people will look to take advantage of current very low borrowing costs to purchase a home," said the board’s report to policymakers. "While buying intentions were down compared to spring 2019, they remained relatively in line with the five-year trend."
Rather than focus stimulus measures on boosting home owners, the group of 56,000 realtors suggested that improving the supply of homes will keep prices affordable for buyers.
Among TRREB's recommendations is that the city should speed up plans to add duplexes and low-rise apartment housing to neighbourhoods with single-family homes.
A version of this plan, released by the city's planning division this month, could potentially add mid-priced housing to up to 35 per cent of Toronto neighbourhoods.
Other TRREB recommendations included postponing property taxes and allowing more flexibility in mortgage stress tests and registered retirement savings plan transfers.
"Housing affordability in the GTA should continue to be a priority for policymakers and the best way to address this is by ensuring adequate and appropriate housing supply, rather than demand-side initiatives," said a statement by the board’s president, Lisa Patel.
This report by The Canadian Press was first published July 14, 2020.