Ontario is taking action to make housing more affordable for homebuyers and renters by introducing the Fair Housing Plan.
In order to truly tame the real estate frenzy in Vancouver and Toronto, interest rates would likely have to rise as well, said Porter.
The intention of the much anticipated housing measures package is to "give everyone some breathing space" in a frenzied market, Premier Wynne said Wednesday. "When young people can't afford their own apartment or can't even imagine owning their own home, we know we have a problem".
After two consecutive years of double-digit gains, average house prices in the Toronto region reached $916,567 in March 2017, up 33.2 per cent from a year earlier.
It's not created to target immigrants the premier said, so a rebate will be available for buyers who subsequently get citizenship or permanent resident status, as well as global students and foreign nationals who make the homes their primary residences. Watsa compared the real estate bubble in Toronto to previous situations in Ireland and Dubai.
The new measure applies to non-Canadian citizens, non-permanent residents, and corporations buying residential properties containing up to six units. For example, worldwide students will not be subject to the tax. There are exemptions for homes that are under construction or were sold during the year, as well as condo units in buildings that prohibit renting.
As well, rent controls limiting increases on all buildings to the rate of inflation - as long as it is 2.5 per cent or lower - will be introduced.
"We have all heard the stories of rent gouging going on in today's market".
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A foreign buyers tax will slow but not stop money coming from Chinese investors, said real estate broker Tony Ma, whose HomeLife Landmark Realty Inc is one of the largest brokerages in Toronto serving buyers of Chinese descent.
Tenants will benefit from the government's additional move to standardize rental agreements, Dent said, which will mean landlords won't be able to hit tenants with extra fees and charges.
There are questions of how well any plan will work given the strength of the economy and the underlying cheap cost of borrowing. Now with Canada's economy hurt by declining commodity prices, it will be hard for the Bank of Canada to raise interest rates enough to quell real estate speculation.
The province is also expanding rent controls and giving Toronto and other municipalities the power to impose a tax on vacant homes, something that Toronto Mayor John Tory has been pushing for. Other municipalities will have the same opportunity.
"(Investing in infrastructure in rural Ontario) is critical for the Toronto housing market.
Ontario will also crackdown on assignment clauses, the practice which allows a buyer who hasn't closed a purchase to pass on the right to buy a property.
It will take time and further work to tackle the affordability challenge in Ontario, but with its new measures, the government has taken an important step toward protecting buyers, renters and owners alike. Seniors who had paid into the Canada Pension Plan for five to 10 working years would be exempt.
Toronto's surging real estate market has triggered debate over whether non-Canadian speculators are bidding up homes and fuelling unsustainable record price gains, or if a lack of housing supply and inadequate urban planning is more to blame.