Toronto Home Crunch Worsens as Trudeau Seeks to Appease Voters

(Bloomberg) -- Buying a home in Canada’s biggest city got even harder and more expensive this summer, just as voters make affordable housing one of the top themes of an imminent federal election. 

Toronto’s real-estate inventories were down 43% from a year ago in August and the number of homes sold dropped 20%, while prices jumped 13% to C$1.07 million ($852,000), according to data released Friday by the Toronto Regional Real Estate Board.

Prices were up 2.4% over July on a seasonally-adjusted basis. That was the biggest month-on-month increase since March.

With some of the world’s least affordable big cities, Canadians are increasingly outraged with the cost of living. To appease voters that blame the housing crunch on speculation, Prime Minister Justin Trudeau is promising to introduce a two-year ban on foreign home buyers if re-elected. 

“The fact that new listings were at the lowest level for the past decade is alarming. It is clear that the supply of homes is not keeping pace with demand, and this situation will become worse once immigration into Canada resumes,” said TRREB President Kevin Crigger.

Market conditions will become even tighter in 2022, with the population in the Toronto area expected to rise, the real-estate board said. 

“With a federal election just weeks away, we are calling on all political parties to continue focusing on housing policies that address supply and affordability across the country,” TRREB Chief Executive Officer John DiMichele said.

Sales of condominium apartments bucked the trend with higher year-over-year sales, board data showed.

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