When it comes to a city as great as Toronto it’s easy to have a little hubris. And with that, its inhabitants are sometimes accused of the short-sighted belief that the city is the centre of the universe.

And while on some level that may hold true, it doesn’t when it comes to house prices. In fact, a recent study by Century 21 Canada shows that seven out the country’s 10 most expensive neighbourhoods belong to our friends out west in and around Metro Vancouver.

Downtown Toronto made the number three spot on the list, while Oakville placed fifth and Richmond Hill, tenth. All the remaining seven spots belong to our friends in Vancouver.

The study measured price-per-square-foot (PPSF) for typical homes in cities and towns across Canada. Using information from Century 21’s independently owned and operated franchise offices, the study gathered information on house prices in the years 1997, 2006 and 2017.

Downtown Montreal ranked as the 12^th most expensive neighbourhood, while Victoria was 18^th, Saskatoon placed 31^st, and Ottawa was 41^st.

According to the study, Oakville leads the pack when it comes to escalating house prices, outstripping every other Canadian area. The price for a detached home in Oakville in 1997 was $105.77 PPSF. By this year, that number had ballooned to $627.33, a 493 per cent jump in 20 years. After Oakville, downtown Montreal is the community that claims the second fastest PPSF house growth with hikes in that city of 468 per cent over the same time period.

The data also showed that Nova Scotia and New Brunswick were the only provinces to experience falling prices in the past decade. Windsor followed by Moncton and Halifax came in at the least expensive cities in which to buy.

A house in Vancouver’s west side is priced at $1210 PPSF. Downtown Vancouver has a PPSF of $962.75. Downtown Toronto comes in with $818.86 PPSF. West Vancouver is at $816.61 PPSF. And Oakville comes in at $627.33.

If you think Canada’s numbers are high, take a look at other countries. The average PPSF in the Kowloon area of Hong Kong is over $3500. This number is 3.5 times pricier than Beijing, which is deemed the second-most expensive city with a PPSF of just over $1000. Shanghai comes in third with $955.39.

Lowest price on the list?  Maricaibo-Zuila in Venezuela at an average PPSF of $10.17.

It’s about to get tougher to qualify for a mortgage thanks to new rules recently proposed by Canada’s federal banking regulator.

The Office of the Superintendent of Financial Institutions (OSFI) is taking aim at uninsured mortgages or those who have down payments of 20 per cent or more. The regulator wants to see stress tests for those borrowers similar to what is happening in the insured market.

That would mean buyers now need to qualify based on the highest posted five-year fixed rate, which is a rate of 4.64 per cent, about two per cent higher than the rate offered by most lenders.

Since buyers will have to qualify for a higher interest rate under this new proposal that means their purchasing power will diminish some estimate by as much as 20 per cent because they won’t be able to borrow as much as before.

But is extending tougher mortgage rules to all borrowers the right tact to take? Or is this another heavy-handed measure that will pop another air hole in the housing market and possibly flatten the wider economy?

This would definitely be a more controversial policy change than those made in the past, says Toronto mortgage broker David Larock. It impacts the borrowers with large down payments who don’t need mortgage default insurance, and that’s a large swath of the market. It’s starting to seem like our regulators are going to keep making changes until they put our real estate markets on their backs.

The new rule not only affects home buyers but also home owners looking to refinance.

About four out of five Canadian mortgages are conventional, uninsured loans with the big six banks holding 32 percentage points of that total. Credit unions have eight percentage points and six percentage points are held by small to medium-sized institutions, including mortgage investment corporations.

The proposal comes following a move by Ottawa last year to require that all insured mortgages undergo a stress test to establish if borrowers could make their payments in the event of such changes as a job loss or interest rate hike. The move is Ottawa’s response to the growing debt of Canadian households, the highest among G7 countries.

Expect the new rule to be in place by next spring at the latest.

What goes up must inevitably come down and for the first time in months the average sale price in Toronto did just that with detached homes dipping in July to below $1 million.

That figure is notable for more than just psychological reasons. With price tags below a million dollars, the real estate market is open to more consumers and that’s good news for everyone.

According to the Toronto Real Estate Board (TREB), August figures show the average detached home in the GTA sold for $972,212. That’s down from $1,000,336 at the end of July.  The average price in August has fallen about $230,000 or 19 per cent since the market’s peak in March.

It’s widely believed the provincial government’s new housing rules introduced in April put the brakes on the city’s red-hot real estate market, controls some believe were necessary to calm out-of-control housing prices.

While the price drop is great news for buyers, TREB says the market in the GTA is expected to post a record year nevertheless. According to TREB, the average sale price of a detached home in July was $996,970, which is still a 13.3 per cent hike over house prices from one year ago.

Says TREB’s board president Mark McLean:  As we move towards a new record for home sales this year, it is important to point out that home ownership demand has been driven not only by low borrowing costs, but also by the fact that the greater Toronto area economy has been performing quite well, with the unemployment rate lower compared to last year.

The under one million figure is an average that combines house sales numbers from across the GTA. If you’re looking at detached homes strictly in Toronto you are likely still paying in the seven-figure range. Based on TREB figures from August, single-family homes there still average about $1.2 million, though that figure is down considerably from March when it hit a peak of $1.56 million.

The $1 million mark is significant because of changes introduced in 2014 which excluded government-backed mortgages on homes sold for more than seven figures. The ban targeted hot real estate markets in Toronto and Vancouver.

Think foreign investment is the cause behind high-priced homes in Toronto and Vancouver? Or how about the immigrant population growth in those centres? Could it be a lack of developable land or maybe it’s speculators?

With the exception of something catastrophic, it’s rarely a single cause that will prompt the kind of heavy volatility we’ve seen recently in those housing markets.

In fact, the Fraser Institute, an independent, non-partisan Canadian public policy think-tank asserts that higher home prices are the result of declining interest rates and rising incomes that allowed Canadians to qualify for much bigger mortgages over the past two decades.

Increased borrowing power, brought about by falling interest rates and rising incomes, is potentially the most overlooked and least understood factor influencing home prices across Canada,  Niels Veldhuis, president of the Fraser Institute, said in a media release last month.

The study ” Interest Rates and Mortgage Borrowing Power in Canada ” says that between 2000 and 2016, interest rates dropped from 7 to 2.7 per cent. During that time, the lower interest rates increased a potential home buyer’s mortgage-borrowing power by 53 per cent.

At the same time, average family incomes grew by 53 per cent. And when you factor in low interest rates with higher wages, the mortgage-borrowing power of the average Canadian climbed by a whopping 126 per cent.

In terms of city centres with the highest mortgage-borrowing power, Calgary came in first at 161 per cent, followed by Vancouver at 118 per cent, Montreal at 115 per cent and Toronto at 100.

This increase in borrowing power ”in simple terms” means that an average Canadian family, dedicating the same share of their income to monthly mortgage payments, can afford a mortgage that’s more than twice as big now as it would have been in 2000, Veldhuis said.

Canadians potential to borrow more money has resulted in homebuyers bidding up the price of homes since the supply of housing is not immediately responsive to changes in demand.

As would-be homebuyers and governments contend with rising prices across Canada, policy makers should look closely at the impact of interest rates, rising incomes and increased mortgage borrowing power on home prices, Veldhuis added.

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.

Singles are one of the fastest growing demographic groups in the country and as such those who live solo comprise more than 25 per cent of Canadian households.

According to Canada Mortgage and Housing Corporation, in 2011 a full 42 per cent of owner-occupied condos housed singletons, and single person households are expected to continue growing.

Here are a few pointers if you’re thinking of taking the plunge by yourself:

Do your homework

There’s a saying about information being power and that’s true here. Whether you are buying for the first time or relocating to a new area talk to friends and colleagues about their house-buying experiences. Ask about neighbourhoods, realtors and public transportation. Search for info online, read books, attend seminars and explore different lenders.

Wish list

Knowing what you want is usually a good thing, unless your wishes are completely out of whack with reality. Condos and townhouses are often ideal for singles. Living on your own means you need less space and a mortgage payment that fits a single income. A smaller living space also means less time, money and resources spent on maintenance.

Safe & sound

Living alone often means issues around security; safety and privacy are high on your priority list. Look for neighbourhoods with lower crime rates, a home with an alarm system, fenced-in yards, secure windows and doors and an attached garage accessible from within your home. Condos fit this requirement quite well with such features as a concierge, underground parking and gated entrances.

Rainy day fund

As a solo homeowner, since you’re the only one to depend on, it’s critical that you begin to build an emergency fund. Being able to handle unexpected expenses without taking on more debt is important. A general rule to thumb for emergency savings is to have enough money to pay today’s bills plus living expenses for three to six months.

Cooperative buying

Because house prices have skyrocketed in the GTA and many prefer to stay in the city rather than move to cheaper towns and cities, there’s a small movement of folks looking to buy a house with other likeminded people. This arrangement can lead to many different buying scenarios so lining up knowledgeable realtors, lawyers and lenders is key.

There was a time not too long ago when homes were bought and sold without the assistance of a professional home inspection. Your trustworthy and handy brother-in-law kicked the tires, so to speak, and his opinion was pretty much all that mattered.

Then all that changed in the ‘90s when home inspections became more and more common, to the point where the majority of Ontario resale home buyers (nearly 65 per cent) hire an inspector.  But Toronto’s red hot real estate market saw the trend change again as buyers skipped inspections to present clean, condition-free offers in an effort to win bidding wars. In this market, homes come with a pre-list home inspection obtained by the seller, which meant a significant drop in the number of home inspections overall.

There has been a good deal of controversy swirling around the profession. Critics say its lack of regulation means unqualified inspectors can set up shop and perform inspections with little expertise. And up until now, home buyers had little recourse if a problem was later discovered that a home inspector should have red flagged.

In April, the Ontario government finally passed a law that will impose new rules on the profession. The Putting Consumers First Act will require home inspectors to be licensed, carry insurance and abide by a code of ethics. The legislation will introduce minimum standards for home inspection reports, contracts and disclosures. Inspectors who breach the code of ethics could face fines of up to $25,000.

According to the Toronto Star, there are an estimated 1,500 home inspectors in Ontario charging between $350 and $600 for a home inspection.

So is spending a few hundred dollars for a home inspection worth it?

That depends.  Many believe it’s a relatively small investment given the cost of real estate. Home inspectors are especially useful for first-time home buyers, who know little about the process. A home inspection can help calm the nerves of a buyer who has no idea what shape the roof is in, where the water shutoff is or how to replace a furnace filter.

But if you’ve bought a few homes in your life, you can probably make due with a Seller Property Information Statement instead. Also known as an SPIS, these optional forms protect the seller down the road should the new owner try to pin a problem on the seller.  Filling one out also demonstrates to buyers that you’re being honest and open because you’re willing to disclose defects or issues.

The SPIS is a two-page document that covers questions regarding zoning, taxes and encroachments. Questions are asked about soil contamination, flooding, oil tanks and grow houses. Other questions focus on moisture problems, types of insulation and renovations or addition made to the house.

So get a home inspection if you’re new to real estate of feeling a bit leery about a property. If you know what to look for, skip the inspection and request an SPIS.

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.

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 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.”