Why top-down approach to cool Toronto housing is an uphill battle

Toronto

CANADIAN Prime Minister Justin Trudeau's Liberal government has been under pressure to rein in runaway home prices, but a study by the national housing agency suggests that he will struggle to exert control over the real estate market in the country's largest city.

Conventional economic factors including population, incomes and borrowing costs accounted for less than half of the 40 per cent surge in Toronto home prices between 2010 and 2016, according to a Canada Mortgage & Housing Corp (CMHC ) study obtained by Bloomberg through a freedom of information request.

Supply constraints, and to a lesser extent speculation and investment, accounted for most of t…