Ontario’s housing market was a roller-coaster in 2017. Highs came in the form of demand and record-breaking price growth. Lows were seen in housing inventory, which in March dropped below 2.5 weeks of supply. The housing industry argues that another low point came by way of Premier Wynne’s 16-point Fair Housing Plan.
The Fair Housing Plan took effect on April 20 as the Province’s solution to the GTA’s affordability problem. Six months deep, we sit down with Tim Syrianos, broker and owner of RE/MAX Ultimate Realty Inc. and president of the Toronto Real Estate Board (TREB), to get his take on the plan, and what needs to happen to put Ontario housing back on track.
Flash-back to spring
Flash-back to the first three months of 2017. It was impossible to go a day without being bombarded by headlines of record-low housing supply and record-high prices. The cause? Simple economics – growing demand, shrinking supply and the ensuing unaffordability.
“The government felt that intervention was needed,” Syrianos says.
Also needed, but not delivered in Syrianos’ opinion, was research, understanding and consultation of stake holders. “TREB requested that the government hold off on any announcements until our Ipsos poll was conducted and more empirical data was analyzed,” he points out. “The government didn’t wait, and introduced a 15-per-cent foreign buyer tax and rent controls. Shortly thereafter our studies showed that foreign investment was around 4.9 per cent. Several months later, the government also verified that foreign buyers accounted for 4.7 per cent of all transactions.
Syrianos says the Province’s move created uncertainty “and fueled negative press and headlines targeting consumers, making them wonder even more how this may affect them in an otherwise very healthy market.”
Now fast-forward to fall
The Fair Housing Plan, and the foreign buyer tax in particular, had some misguided effects. Rather than cooling foreign investment (which, according to TREB’s research, was never at issue) it created a temporary physiological shift toward buying, Syrianos says. “It also has proven that it doesn’t solve the supply problem.“
In fact, Syrianos maintains that the new rent controls hurt housing supply even more. “While renters applauded the announcement and it won support. Investors put the brakes on purpose-built rental buildings and instead shifted toward building condos, or even not building at all. The availability of rental units is now under one per cent.”
At the very least, there’s a lesson to be learned from this seemingly unfair Fair Housing Plan. “Policies, without proper consultation and thought, can have grave consequences in many ways and sectors of the market. The most affected are the consumers.”
As a representative of Canada’s largest real estate board and most-significant housing market, TREB is doing its part to pull for the “little guy” when it comes to issues like affordability, supply and policy.
“I’m proud of the role of TREB, and honored to be this year’s president,” Syrianos says. To him, being part of TREB is more than just a membership and the MLS. “Advocating for home ownership and being a voice of common sense – based on knowledge from empirical data – is a tremendous value to all stake holders and levels of government.”
2018 and beyond
Real estate is a hot media topic and will continue to be, with some key issues on the table.
“TREB will continue to focus on being a partner and not an adversary,” Syrianos says. This includes educating policy makers and regulators how a vacancy tax infringes on property rights; how the municipal land transfer tax is a contributor to the supply problem; and how Realtors should have the right to incorporate, regardless of tax laws.
“For members, the reality is that real estate and how it’s practiced is in a state of tremendous change. How we conduct ourselves and how we interact with consumers will continue to be in the spotlight. We welcome this.
“Our goal is to continuously elevate professionalism and assist our members with the tools to succeed. A successful member is a successful consumer.”