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Published: Thu, September 08, 2016
Economy | By Melissa Porter

Home tax here to stay

Home tax here to stay

But experts say it's too soon to tell whether Vancouver's tax, which was introduced on August 2, is having any impact on Toronto's real estate market. Dan Morrison, president of the real estate board, said on Friday that the region was seeing fewer sales of the highest-priced detached homes and fewer sales of detached homes compared with other kinds of housing, causing average prices to slump.

Home sales in Toronto jumped to a record in August over the prior year, diverging from Vancouver where a foreign investor tax cooled Canada's hottest housing market.

"Whenever you have a situation like that, you're going to have strong upward pressure on prices". "The resulting growth in households coupled with favourable economic conditions and low borrowing costs means that we remain on track for another record year for home sales", said TREB's Mercer.

But she says the tax was a step in the right direction. "So when I see the new numbers and they tell us that they've slowed down the price increases for housing, I say good, because that's what we were trying to do. People want real solutions, not solutions that make them feel better for 20 minutes". But, she added, it's still early days.

British Columbia Premier Christy Clark speaks about shadow flipping in the real estate industry, in Vancouver, B.C., on Friday March 18, 2016.

Since the tax kicked in at the beginning of August, home sales dropped 26 per cent year over year, signalling a return to more typical levels.

Prices in Vancouver continued to rise, however, with the benchmark price for all residential properties climbing 31.4 per cent from a year ago to $933,100.

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