Big bank calls for real estate policy action

CEO calls on entire industry, as well as government officials, to come together to determine solutions.

“Longer term, I believe all parties need to come together -- governments, developers, realtors, banks, community groups and others -- to accelerate our progress in finding policies and solutions for this issue,'' said RBC CEO Dave McKay.

McKay spoke Thursday at a shareholder meeting about his “increasing” concern about Toronto and Vancouver’s housing markets.

He is in favour of government intervention, saying increased housing prices are the result of an unhealthy combination of factors and that “all of these factors are mixing to push prices up to unsustainable levels, stressing household balance sheets and locking many people out of the housing market.”

The comments follow the latest housing stats releases from Toronto and Vancouver.

The average home price in Toronto jumped 33.2% year-over-year to $916,567. Vancouver’s prices, despite prices dampening over the past few months, still sit at an average of $919,000.  

While it would be admirable to see all interested parties mentioned by McKay work together to find a solution, chances of that happening are likely slim.

Government officials seem intent on implementing taxes to curb real estate speculation and foreign investment; real estate boards, meanwhile, have vehemently opposed those ideas, instead arguing in favour of increasing housing demand.

It remains to be see what, if anything, the government will do to further address affordability in Vancouver and Toronto.

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COMMENTS

  • by 2017-04-07 10:40:08 AM

    The banks can help solve the problem by reducing the amortization period to just 25 years and increase the down payment for the GTA alone to 25%. If that does not solve the problem, then increase the down payment to 30%. This does not involve the government whose action could be a negative. The banks should stop looking for market share which they didn't do in 1989 and that caused the losses to them. Perhaps the trust companies should also do this.
    Hal Jackman, who ran National Trust, asked OSFI to do this in 1989 and it said it couldn't do this as it could only act nationally, so the banks and trust companies know this and back then they all fell off the closing cliff together.

  • by Jayvid 2017-04-08 3:03:15 AM

    Raise rates! Problem solved.....

  • by 2017-04-08 3:04:11 AM

    Raise rates!

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