Help may be needed to cool house prices: bank

TORONTO — Further government intervention will be needed if Toronto house prices continue soaring after the spring home-buying season, the head of Canadian banking at Scotiabank said Tuesday.

James O’Sullivan said the Toronto housing market is one that policymakers should be most concerned about these days, given that prices have risen by nearly 30 per cent over the past year.

“Double-digit price increases are not sustainable and they’re not healthy,” O’Sullivan said after Scotiabank’s annual general meeting.

“This market has been going straight up for a very long time. So it’s going to come to an end at some point and it’s a question of how it ends. And we want to see it correct smoothly, we want to see a soft landing and what that would argue for is actions sooner rather than later.”

O’Sullivan said Scotiabank hasn’t developed a position yet on what measures should be implemented, but if there’s government action, the bank will support it.

“Our core belief is that we need to move through this spring market. The spring market is everything in housing,” he said.

“If at the end of that spring market Toronto still has higher volumes, strong double-digit price increases, then we think it will clearly be time for further action and we will be supportive of that action.”