TORONTO — Bill Morneau will make an announcement today on preventative measures to keep the housing market stable, Canada’s Finance Minister said in a tweet this morning.
This morning I'll be announcing preventative measures for a healthy, competitive and stable housing market.
— Bill Morneau (@Bill_Morneau) October 3, 2016
Morneau will make a housing-related announcement today in Toronto at 11:15 a.m., according to an advisory that didn’t give further details.
Canadian officials are seeking ways to cool Vancouver and Toronto home prices — without harming other regional markets — in a bid to control record household debt levels, make homes more affordable and ease chances of a crash. Years of surging prices, a condo construction boom and low borrowing costs have drawn warnings that gains in the nation’s two most expensive markets probably aren’t sustainable, presenting a risk to the financial system.
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Last year, the finance department along with two federal regulators — the Canada Mortgage & Housing Corp. and the Office of the Superintendent of Financial Institutions — announced measures to stem gains. They included tightening mortgage requirements on homes worth more than $500,000 to indirectly target Toronto and Vancouver.
Morneau has since sought to devolve some of the responsibility to the provinces and cities. British Columbia imposed a 15 per cent tax on purchases by foreigners. That measure took effect in August and the most recent data suggest the levy disrupted the market that month. The real estate boards of both Toronto and Vancouver will give the latest monthly sales data this week.
In a Sept. 6 interview with Bloomberg, Morneau said the impact the Vancouver tax will have on prices isn’t yet clear. “I don’t yet have enough information to inform me as to whether it has had any short-term impact,” he said. “We need to keep considering the risk of the market and that means we’ll need to keep talking to B.C. and Vancouver.”
In June, Morneau created a working group of officials from the two cities and the provincial governments of Ontario and British Columbia to study the matter and make proposals.