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Archive for the ‘Toronto Market Updates’ Category

Toronto’s Housing Looking Up Again

Monday, August 14th, 2017

The dip in Toronto’s housing market is expected to bounce back soon, says the federal housing agency.

The Canada Mortgage and Housing Corp. (CMHC) says the city’s current decline will be short-lived and real estate prices will pick up again as demand returns. According to the Toronto Real Estate Board, prices in the city fell from an average of $919,589 in April to $793,915 in June; however, the CMHC expects a rise in prices again due to a strong economy and a lack of housing supply.

Toronto’s red-hot real estate market was curbed in the spring when the Ontario government introduced measures designed to cool an overheated market. Included in the measures was a controversial 15 per cent tax on foreign buyers.

The CMHC said similar taxes imposed against foreign buyers in Vancouver worked to calm the market there by reducing the number of foreign buyers. However, the Vancouver market has since picked up again.

“The response we’re seeing in the Toronto market seems almost emotional and a knee-jerk reaction to some of the changes, which suggests that these impacts will be short-lived,” Dana Senagama, CMHC’s principal market analyst for Toronto, told the Canadian Press.

The province’s measures also include more rent controls and legislation that allows municipalities to tax vacant homes.

“If job creation continues in Toronto … and the economy continues to fuel the housing demand, we can expect some of the pressures on house prices in Toronto to resume,” said Bob Dugan, CMHC’s chief economist.

In the CMHC’s recently released housing market assessment, the agency ranked its overall risk rating for the national housing market at strong. The quarterly report is based on information collected from the first quarter of 2017.

Good New for Home Buyers

Wednesday, June 7th, 2017

Buyers eying the GTA will be happy to hear that the Toronto real estate market finally appears to be taming down somewhat.

The Toronto Real Estate Board reported that existing home sales fell in May by 20.3 per cent from the previous May, while prices edged down by about six per cent from April to May.

Though it’s too early to tell for sure, it’s believed the provincial government’s institution of new rules designed to control the housing market is the reason for the cool down.

“The actual, or normalized, effect of the Ontario Fair Housing Plan remains to be seen,” said TREB’s market analysis director Jason Mercer. “In the past, some housing policy changes have initially led to an overreaction on the part of homeowners and buyers, which later balanced out.”

In April, the province announced a 16-step plan to tame Toronto’s out-of-control real estate market. The plan targeted foreign investors with a 15 per cent non-resident speculation tax on property purchases and more rent controls which serve to restrict rent hikes.

While home buyers will be pleased with softer prices, they can also expect to benefit from a greater housing supply. Active listings rose nearly 43 per cent in May from the previous May. As for the breakdown, low-rise homes including detached and semi-detached houses and townhouses were up considerably in May from a year ago, while condominiums were down.

“The increase in active listings suggests that homeowners, after a protracted delay, are starting to react to the strong price growth we’ve experienced over the past year by listing their home for sale to take advantage of these equity gains,” Mercer said.

All of these factors contribute to a less frenzied buying model, which means less pressure plus more time and room to think for those looking to purchase.

Some say the Toronto market is echoing Vancouver, which also slapped foreign buyers with a 15 per cent tax last August. While the market subsequently softened it appears to have recovered with sales and prices again on the rise last month in Greater Vancouver.

Ontario’s Fair Housing Plan

Thursday, May 11th, 2017

The Ontario government introduced a housing plan late last month that aims to protect home buyers and renters from being priced out of the turbo-charged Toronto real estate market.

The 16-point plan targets actions that are expected to cool the city’s overheated market with a comprehensive set of measures designed to help more people find affordable homes, increase supply, protect buyers and renters and bring stability to the real estate market.

Included in Ontario’s Fair Housing Plan is a 15 per cent foreign buyers’ tax, similar to the one introduced last year in Vancouver. The tax in Ontario will be levied against all foreign-bought properties within the Greater Golden Horseshoe, as they too have been affected by unprecedented price growth.

Home buyers should like the plan as it is expected to cool the housing market, which has experienced double-digit gains in the past few years. In April the average Toronto house price hit nearly $921,000, almost 25 per cent more than a year ago.

Renters may like it even more so as rent control will be expanded to buildings constructed after 1991, which were previously not covered by rules. Given the city’s tiny vacancy rate – 1.3 per cent, the lowest in 12 years — some landlords were commanding astronomically high rents, even doubling rents once a lease came due.

Ontario’s Fair Housing Plan includes additional measures, such as introducing a targeted $125-million, five-year program to encourage the construction of new purpose-built rental apartment buildings by rebating a portion of development charges.

The government will also work to better understand and tackle practices that may be contributing to tax avoidance and excessive speculation in the housing market, such as “paper flipping” — a practice that includes  entering into a contractual agreement to buy a residential unit and assigning it to another person prior to closing.

The province is also introducing legislation that will allow Toronto and potentially other municipalities to introduce vacancy taxes.

The Fair Housing Plan will also include a new Housing Supply Team of dedicated provincial employees to identify barriers to specific housing development projects and work with developers and municipalities to find solutions.

Toronto: Home to World’s Fastest Growth in House Prices

Thursday, May 11th, 2017

 

Toronto is number one for many reasons. The New York Times deems it a first rate travel destination. It’s also pretty good on the scales of diversity and gender equality. And – no surprise here – it earns high marks as one of the best cities in the world to live.

That could be why it also is number one when it comes to having the world’s fastest pace of house price growth.

According to research conducted by analytics firm CoreLogic, Canada’s largest city beat out Sydney, New York, even Tokyo in terms of how quickly its house prices escalated last year.

According to the research which was carried out for The Daily Telegraph in Australia, Toronto’s median house price climbed 19 per cent in 2016, surpassing next-in-line Sydney at 18.4 per cent and third-place Vancouver, where house prices rose by 14 per cent.

According to the Huffington Post, the survey measures median house prices, which is a different measurement than the average figures used by real estate boards in Canada. And average prices show even stronger growth in the GTA with a year over year hike of nearly 28 per cent in February to almost $876,000.

Naturally, these figures are not sustainable. House prices will begin to slow. The Financial Accountability Office of Ontario (FAO) is forecasting slightly lower house prices over the next three years and the strong possibility of a market correction.

The FAO envisions a correction that could see house prices decline by 10 per cent within three years or a worst-case scenario of a 20 per cent drop, says the Huffington Post.

In its report, the FAO expects “a leveling out in residential investment over the next several years, consistent with a modest decline in housing prices,” but “a sharper housing price correction remains a significant risk, both for the economy and the province’s tax revenues.”

Average Toronto house price hits $921,000

Thursday, May 11th, 2017

Here’s a strange anomaly for you: Even though more homes were for sale this April compared to one year ago, home prices were up by as much as 24.5 per cent that month compared to a year earlier.

If you’re still in the market for a house you may have noticed that significantly more homes – 33.6 per cent to be exact — were for sale last month compared to April of 2016. But the greater supply did little to stem the upward flow of the city’s house prices, according to figures released by the Toronto Real Estate Board (TREB).

Based on TREB data, the average cost of a home in Toronto climbed to nearly $921,000 last month, up almost $200,000 from last April’s average house price of $739,762.

April also saw sales nudge down by 3.2 per cent compared to a year ago, a sign, say some, that the Toronto real estate market is finally cooling off.

Any which way you look at it, more listings will inevitably signal a positive note for the Toronto real estate market, says a TREB economist.

“It was encouraging to see a very strong year-over-year increase in new listings,” said Jason Mercer, director of market analysis. “If new listings growth continues to outpace sales growth moving forward, we will start to see more balanced market conditions.”

Still, the board is not expecting any downturns in home prices. In fact, Mercer says the spring and summer months will see the growth of house prices well above the rate of inflation.

A greater housing supply could be a reaction to the market’s big year-over-year price jumps and the province’s newly implemented Fair Housing Plan, though it’s too early to tell.

Another indicator that the market is cooling showed in sales of detached homes, which slipped slightly from March to $1,205,262 from $1,214,422. Semi-detached homes also dipped a bit last month, while condo prices increased by 4.3 per cent.

The data included on this website is deemed to be reliable, but is not guaranteed to be accurate by the Toronto Real Estate Board. The trademarks REALTOR®, REALTORS® and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. Used under license.