The Financial Post reports in its Thursday edition that in Canada's housing market, scant supply is often seen as the culprit for soaring prices. The Post's Bianca Bharti writes, however, that a new report from Bank of Montreal suggests that listings are strong; it is just that demand is far stronger.
For the past six months, on average, new listings have been coming to market 10 to 15 per cent faster than prepandemic levels, according to the report by BMO senior economist Robert Kavcic. At the same time, home purchases have gone up about 50 per cent, he said. "It's pretty clear there's not a supply problem here on the resale market," Mr. Kavcic told the Post.
"We are getting plenty of supply by historical standards, it's just getting completely vapourized by demand." The report adds fuel to a debate about whether the government should enact policy changes to cool a housing market that has seen prices jump 25 per cent from last year. Mr. Kavcic is one of those who have come out to say policy-makers need to act. In a report released last week, Mr. Kavcic suggested several options, including placing a ban on blind bidding, imposing a speculation tax and allowing a capital gains tax on non-primary residences.
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