Housing Bubble In Canada

Housing price is a sensitive issue for everyone. Generally, the more expensive houses are, the more difficult it is for people to live. In fact, Toronto is one of the cities which has the most expensive housing price in the world. According to Royal Lepage’s website, an average Toronto house price was 624,923$ in 2015, the second highest price among all Canadian cities. Moreover, an article by Sherman (2016) states that Toronto’s house price was increased by 8 percent in 2015; this figure was ranked 12th in the world. As we can see, People who live in Toronto have been suffering from this problem. It is clear that an effective solution that stabilizes Toronto’s high housing price should be suggested by the Mayor of Toronto.
There are several
This is not a common phenomenon in other Canadian cities. It is mentioned in an eBook, Canada’s Housing Bubble: An Accident Waiting to Happen (David, 2010, p.4), that “Generally speaking, the bursting of housing bubbles is rare in Canada. There have been only three Canadian housing bubbles burst in only two cities- Vancouver and Toronto- since 1980. Vancouver’s first housing bubble in 1981, the second declined gradually in 1994. Toronto had one housing bubble, which burst in 1989.” These statements show two facts, one of which is that Toronto’s housing bubble problem is not a common phenomenon in Canada and the other is that this matter has to be discussed at the national level. In other words, the Mayor of Toronto has to try to solve
In an article by Bell (2016), John Andrew, director of the Queens’s Real Estate Roundtable, suggests that tax rates on foreign owners should be increased and said that “this could have a very significant effect on cooling housing markets, if the property tax rate for foreign owners was significantly higher.” The concept of this solution is simple; there are so many foreign buyers who speculatively invest in Toronto’s real estate market that the problem can be solved by increasing taxes on them. Vancouver, where the average house price is more expensive than Toronto’s, has already tried to cool down the high house price by imposing 15% more tax on foreign buyers. It is mentioned in an article by Kane (2016), “Home sales in the Vancouver area tumbled 26 per cent in August compared to the same month last year, as observers say a new tax on foreign buyers accelerated a cooling trend in the