The CEO of TD Bank says too many factors are driving accelerated gains in Canada’s housing market and that urging policymakers to intervene might be unwise.

Bharat Masrani also says that the massive increases are related to the COVID-19 pandemic and that, once the crisis concludes, the rapid valuation increases we’ve seen for the last 10 months should slow down. In addition to buyers purchasing bigger abodes and taking advantage of both work-from-home policies and low interest rates, Masrani says TD is comfortable underwriting mortgages in the current climate—its residential portfolio was $212.5 billion in Q1-2021, up 6.2% year-over-year.

Masrani is responding to calls for the government to introduce cooling measures into the housing market, including by rescinding the capital gains tax exemption on principal residences. He isn’t the only one trying to pour water over the fire.

“Yes, Canada, we have a housing problem with the unprecedented levels of activity—from soaring price increases across virtually all markets spurred-on by overwhelming demand to profound challenges in housing affordability. While COVID-19 has made this significantly more pronounced, the issues facing Canada’s housing market were brewing long before the pandemic struck,” wrote Elton Ash, RE/MAX Western Canada’s EVP, and Christopher Alexander, RE/MAX Ontario-Atlantic Canada’s CSO and EVP.

In lieu of the government intervening in the market with cooling measures, Ash and Alexander have instead proposed incentivizing new housing supply. In light of incredibly high sales-to-new-listings ratios in major markets, the duo might not be wrong, noting that there’s also a dearth of family-sized condos. Moreover, housing sprawl will not decelerate so long as housing prices are scorching.

Other suggestions include opening up protected lands for development given that Canada expects 1.2 million new immigrants through 2023, and introducing a mandatory condition on every offer that makes purchasing a home conditioning on financing. The latter’s purpose of the latter is to “reduce buyer’s remorse and would help to ensure that people can afford what they are buying.”

The most interesting suggestion, though, is a watchdog to review homes that sell well over asking.

“This would ensure fair listing prices, and prevent homes being listed well below market value to create bidding wars. Agents who are found to be contravening these rules would be forced to face fines.”