That’s the view of ratings agency Fitch which believes that policies including a tax on foreign buyers, rent controls and other proposed measures, are likely to lead to a correction in prices and slowing of sales activity.
It highlights a 3 per cent drop in Vancouver house prices following the introduction of a 15 per cent tax on foreign buyers last
August without the rent controls proposed for the GTA. Prices have since rebounded to near-peak.
Fitch says that rent controls will restrict the ability of investor-landlords to increase rents which should dampen price growth in the condo market as some highly-leveraged investors are forced to sell, and speculators may follow suit.
More market update:
The measures announced by the government to curb the rising house prices in the Greater Toronto Area will have more “meaningful impact” than those already implemented in Vancouver.