Royal Bank of Canada CEO Says More Measures May Be Needed to Cool HousingBy
McKay says Toronto may mimic Vancouver with rebound from slump
New housing measures would ensure healthy market balance
More measures to cool the housing market may be needed if Toronto sees a bounce-back in prices as Vancouver did even after a foreign-buyers tax was imposed, according to Royal Bank of Canada Chief Executive Officer Dave McKay.
McKay said in a conference call discussing RBC’s third-quarter results that he’s already seeing a slowdown in home prices in Toronto after the Ontario government announced a 15 percent tax on foreign buyers in April. Ontario’s move followed similar measures enacted in British Columbia in August to cool an overheated Vancouver housing market.
“What we also saw in Vancouver is activity picked up about six to nine months after the policies went in," McKay said on the call Wednesday. “Therefore, additional measures may be needed to maintain a healthy balance."
McKay said he’s seen “a healthy moderation" in housing activity in Toronto and Vancouver supported by policy actions by provincial governments and Canada’s banking regulator. He added that he’s “encouraged" by those measures and its impact on housing. McKay, who heads Canada’s second-biggest bank by assets, said "fine tuning" may be required given the bounce-back seen in Vancouver.
Toronto home prices posted their biggest monthly drop in at least 17 years in July and sales plunged as government efforts to cool the market made buyers leery.