Ontario’s Places to Grow Act with rules on intensification and density targets is pushing up land prices along with the Greenbelt Act which requires 40 per cent of new development to be within existing urban boundaries. This figure could soon rise to 60 per cent.
Tal dismisses the idea that foreign buyers are a major factor in rising home prices in the GTA and also says that low interest rates are not increasing home prices, although he believes lending restrictions should be tightened to reduce access to higher levels of debt.
Overall though, the economist says that supply issues must be tackled to ensure that prices ease to more affordable levels.
Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate
Developers in the Greater Toronto Area are sitting on plots of land rather than building homes according to CIBC economist Benjamin Tal. Builders aren’t building because they expect the price of lots to rise due to limited supply and that, Tal says, is down to city policymakers.