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“I don’t think governments should be doing anything to try and curtail demand right now,” said Peter Norman, chief economist and vice-president of Altus Group. “If anything, government should be trying to reduce the barriers to building, whether it’s land development to encourage more supply to come forward.”

Norman, who believes foreign investment is not the reason behind price increases, but is actually stimulating supply of high-rise construction, says Toronto is poised to add new low-rise supply because of a number of developments that have finally made it through the planning process.

“Where we do have foreign investment in the GTA and Vancouver, it is driving supply. Most of the discussion is foreigners are buying product and not using it. That’s a small part of the question. Most of the foreign money is financing new construction,” said Norman, adding that the falling Canadian dollar has been the real driver of foreign demand. “People are just telling the wrong narrative.”

The government has introduced multiple measures to try and cool the housing market, the latest being a Liberal initiative in February that increased the minimum down payment from five per cent to 10 per cent for any amount of a purchase over $500,000. The measure only applies to insured government-backed mortgages, which are now limited to homes valued at $1 million or less. Homes sold for more than $1 million require a down payment of at least 20 per cent.