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Finance minister to hold meeting in Toronto on house prices

Last Updated Apr 13, 2017 at 4:39 pm EDT

A real estate sold sign hangs in front of a west-end Toronto property Nov. 4, 2016. THE CANADIAN PRESS/Graeme Roy

The federal finance minister is set to meet with his Ontario counterpart and the mayor of Toronto next week to discuss the hot housing market in the Greater Toronto Area.

Finance Minister Bill Morneau’s office said the meeting will take place next Tuesday in Toronto.

Morneau had written to Ontario finance minister Charles Sousa and Toronto Mayor John Tory last week, asking to convene a meeting on the topic of eroding housing affordability in the city as soon as possible.

The gathering of the three politicians comes as Ontario’s government works on a package of housing affordability measures that it has said will be unveiled soon.

“We’re just trying to figure out what we can do without over-correcting the system, while at the same time providing greater support for those who want to get into the market,” Sousa said Thursday.

Sousa noted that Tory has called for a tax on vacant homes, while he himself has called for the federal government to change the taxation of capital gains real estate speculators make on homes that aren’t their primary residences.

Morneau did not make that change in the most recent federal budget, but Sousa said he’s “encouraged” by Morneau’s willingness to meet with him to discuss it.

Sousa has also floated other possible measures to help cool the GTA’s housing market, including implementing a tax on foreign buyers.

The average price of detached houses in the Greater Toronto Area was $1.21 million in March, up 33.4 per cent from last year. For the city of Toronto, the average price of detached properties hit $1.56 million, an increase of 32.8 per cent from March 2016.

Bank of Canada governor Stephen Poloz said this week that the jump in house prices in Toronto suggests that demand is being driven more by real estate speculators and investors than homebuyers.

Poloz said strong employment growth and immigration have fuelled demand for housing in the GTA in the past, but he said those factors do not justify the recent spike in home prices.

Ontario Premier Kathleen Wynne has said that while there is no one measure that will change market dynamics, she wants the provincial government’s initiatives to “calm” the process of buying a home.

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