OTTAWA — In a bid to slow the soaring growth of housing prices in the Toronto area, Ontario officials announced several measures on Thursday, including a 15 percent tax on residential buyers who are not residents or citizens of Canada.
The average price of a single-family house in Toronto rose 33 percent in March compared with March 2016, to 1.6 million Canadian dollars ($1.2 million), leading many young families to abandon plans to become homeowners. Bidding wars, often highly publicized, have erupted over houses that would not attract a second glance in a less heated market.
While Ontario’s premier, Kathleen Wynne, emphasized the need for the 15 percent tax on outside purchasers, similar to one enacted recently in Vancouver, British Columbia, there are no statistics on the number of Toronto houses that have gone to such buyers. Ontario’s finance minister estimated that they make up 8 percent of the market, but other estimates are well above or well below that figure. Neither Ms. Wynne nor members of her cabinet were able to quantify the effect of what they called “phantom” purchasing.
“This is a complex issue,” Ms. Wynne said. “There wasn’t one single thing we could do that would deal with the issues we’re confronting.”
Political pressure is escalating on Ms. Wynne and the government of Prime Minister Justin Trudeau to cool off the Toronto market.
At the same time, both levels of government have been loath to take steps that effectively punish current homeowners by forcing down the value of their property.
On Thursday, the premier said that the high prices were not entirely a bad thing, calling the market boom “the unwanted consequence of a strong economy.”
British Columbia’s experience does not provide clear evidence of the effectiveness of its 15 percent nonresident buyer’s tax. While price growth in Vancouver has slowed since its introduction — prices fell on average 1.9 percent last month — the market there was softening well before the tax was imposed. And real estate industry experts said they anticipated that prices would rise again soon.
Some economists have encouraged Ontario to impose a nonresident tax in what is generally known as the Greater Toronto Area.
“The province is aiming at those effectively parking wealth in the G.T.A. real estate market, and we have been fully in favor of such a move for some time,” Robert Kavcic, senior economist with BMO Capital Markets in Toronto, wrote in an analysis.
But Mr. Kavcic was also skeptical that the tax and other measures announced by Ms. Wynne would have a substantial effect.
He said the tax would…