New GTHA Housing Market Measures Not Far-Reaching Enough, Says Ali Salarian, VP. Pay Per Service Realty
Thornhill, ON 25/04/2017
Real estate broker & V.P. of Pay Per Service Realty and former corporate banker, Ali Salarian has described the 16 new housing measuresrecently introduced by the government as tentative and lacking decisiveness and direction desired by GTHA real estate stakeholders.
Speaking recently, Salarian broke down each of the new measures and made the following observations:
“The new 15-per-cent Non-Resident Speculation Tax (NRST) may not have a big impact on the market because foreign buyers represent only 5-8% of the market, and the government has no exact data.
While expanding rent control is a step in the right direction, most rental units are privately owned, and because fewer buildings were built prior to 1991, this measure will not solve the rental supply problem at all.
Strengthening the Residential Tenancies Act to further protect tenants and ensure predictability for landlords is good for tenants, however it will not solve the rental supply issue.
Leveraging the value of surplus provincial land assets to develop a mix of market housing and new might certainty help, but the main issue here is that developers get permits to build and then keep them on hold in order to let the price increase, as per the Mayor of Oakville’s recent statement.
The vacant homes property tax is a good step, but there are not many vacant units in the market due to high rent and sale demand. Also, matching property tax for new multi-residential apartment buildings and other residential properties, so as to encourage new purpose-built rental construction will not work. This is because developers make more money from sale of units than renting, as annual rental yields are relatively low.
This also applies to the plan to introduce a targeted $125-million, five-year program to further encourage the construction of new rental apartment buildings by rebating a portion of development charges. The only way this can work is to encourage a government investment pension fund company to do so.
Creating a new Housing Supply Team to identify barriers to specific housing development projects and work with developers and municipalities to find solutions is very good idea that should be expanded to assess the loosely regulated activities of developers within the current sales system.
The plan to tackle practices such as “paper flipping,” is very good, and it must be supported by a regulation that prohibits assignment until projects attain 90% completion. Likewise, reviewing the rules real estate agents follow especially regarding practices such as double ending is good. Also, the multiple offer situation has to be better controlled by RECO through electronic proceeding.
The CRA should go deeper and tax any capital gains income from properties purchased as investments by non-principal residence sellers. Rental income has to be exempt in GTHA for awhile in order to increase the rental unit supply.
Regarding the plan to examine a range of unit sizes in higher density residential buildings to accommodate more people and protect the environment, it is important to permit more 3 bedrooms’ condo apartments within Toronto and other metropolitan cities in order to accommodate bigger families in line with the demographic changes and decreases in purchase affordability.
Salarian says “the fundamental problem is the supply. Supply issues can be sorted out by releasing more lands for residential developments in the suburbs of Toronto and urging the developer to build those lands with permits to build without any hold back on release”.
About Pay Per Service Realty
Pay Per Service Realty is a modern brokerage with a different approach to real estate practice. Serving the GTA area with an experienced team of in-house associates and external partners, it maintains a strong online presence and a focus on customer convenience and process streamlining. For more information about Pay Per Service Realty, please contact Ali Salarian at 905-209-7400, or email firstname.lastname@example.org. Alternatively, you can visit https://ppsrealty.ca/