Prioritize Supply and Demand and Not Foreign Buyers – Commentary on Ontario Policy
Two Fraser Institute academics pointed out the undeniable influence of supply and demand in the midst of the issue on the recent policy changes or the impact of foreign buyers in the real estate market in Toronto.
Analysts Steve Lafleur and Josef Filipowicz wrote a Toronto Sun guest column stating the impossibility of the influence of a small percentage of buyers on the massive housing price appreciation specifically in the GTA in the past ten years. They argued the need to concentrate on government regulations and ensure that they do not hinder any supply in the housing market in order to meet the demands. This should take precedence over the importance of focusing on a small group of buyers.
The two analysts added that the problem is not inbound migrants that are attracted to the strong fundamentals of Ontario as long as new housing space developments are not blocked due to regulatory red tape.
The duo wrote that obtaining a permit in the Greater Golden Horseshoe would typically take one and a half years while each unit costs $50,000 in compliance with regulations. Rezoning properties could also affect the approval timelines. An estimated two-thirds of the region’s new houses need to comply with this procedure, thus adding an average of 4.3 months before the builders could finally obtain permits.
There is an obvious omission in the present Fair Housing Plan as only 1 of the 16 measures that the Queen’s Park proposed in April mention the predicaments to housing construction. Filipowicz and Lafleur also expressed their hopes that the referenced “Housing Supply Team” in the Plan could eventually result in greater cooperation among municipalities and developers especially in identifying the opportunities to simplify and make effective the process for development approvals.