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The Greater Toronto Area’s housing market continued to cool during the second full month after Ontario unveiled its Fair Housing Plan, a major policy move including a much-publicized foreign-homebuyer tax for the Greater Golden Horseshoe.

 

Some 7,974 home sales were recorded via the Toronto Real Estate Board (TREB)’s listing system in June, plunging 37.3 per cent from the activity observed during the same month in 2016, the best year on record for GTA home sales.

 

But this June’s slowdown wasn’t primarily due to foreign buyers leaving the market, TREB suggests, as observers continue to debate their impact on home prices.

 

The board refers to recent provincial government data showing that from April 24th to May 26th, foreign homebuyers accounted for just 4.7 per cent of the 18,282 transactions recorded throughout the Greater Golden Horseshoe.

 

Pointing to that sliver of overall sales, TREB instead attributes the cooling to buyers sticking to the sidelines to see how the effects of the plan pan out as well as sellers rushing to list homes on a hunch that prices have peaked.

“The end result has been a better supplied market and a moderating annual pace of price growth,” writes Tim Syrianos, TREB’s president, in the board’s latest monthly news release of data.

 

As the number of new listings in June surged 15.9 per cent on a year-over-year basis, annual price growth moderated once again.

 

Until last month, the average selling price of a GTA home had been posting double-digit annual gains. But in June, the average sale price was $793,915, up 6.3 per cent compared to a year earlier.

 

“A better supplied market has certainly been a key factor influencing the moderation in price growth,” the TREB report reads. “However, the average selling price has also been impacted by the fact that the greatest home sales declines were for more expensive home types, most notably detached houses,” the news release continues.

 

Detached homes in the GTA sold for an average of $1,055,863 in June at an annual rate of increase of 7.8 per cent. In May, this segment saw prices surge 15.6 per cent annually.

June price growth was strongest in the more-affordable condo market, where condos averaged a selling price of $519,784, an increase of 23.2 per cent from a year ago.

 

Demand for condos has been insulated from the effects of the Ontario Housing Plan as these dwellings remain the final affordable option for many homebuyers in the Greater Golden Horseshoe, one economist recently noted.

 

All housing types posted month-over-month benchmark price declines this June with the exception of condo apartments, which saw prices up 1 per cent from May. Detached, attached and townhouses experienced monthly price drops of 1.3 per cent, 1.4 per cent and 0.04 per cent, respectively.

 

The Ontario Fair Housing Plan, which also included an expanded rent control mandate for virtually all rental units — not just those built before 1991 as was previously the case — and the possibility of higher interest rates have also led TREB to update its forecast.

 

A day after RBC downgraded its forecast for Ontario home sales, TREB has done the same for the GTA, the province’s most-active market.

 

The board now expects home sales to fall within the range of 89,000 and 100,000 this year, shy of the 2016 yearly record of 113,133.

At the same time, GTA home prices are expected to fall short of last year’s 17.3 per cent annual appreciation, as per TREB’s MLS index.

 

This year, TREB projects home prices in the GTA will rise between 13 and 18 per cent.

“While an annual rate of growth in this range will still be very strong from a historic perspective, it is important to note that it will also represent a moderation in year-over-year average price growth in the second half of the year,” the TREB news release adds.

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February 2017 figures released by the Toronto Real Estate Board for the 6IX 

 

The average selling price was up by 27.7 per cent year-over-year to $875,983.

Annual rates of price growth continued to be strongest for low-rise home types, particularly

detached houses. Growth rates for condominium apartment prices were also in the double

digits, likely a result of strong demand from first-time buyers.

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Young homebuyers are the lifeblood of many agents’ business, so a report that indicates that it makes sense for millennials to purchase a home rather than rent in most cities is comforting news.

The latest edition of Rent vs. Buy from Trulia, which takes into consideration some millennial factors, found that “buying is not only 23 per cent cheaper than renting nationally, it is also cheaper than renting in 98 of the nation’s top 100 markets.”

While this calculation shows that buying is still cheaper than renting, the difference is pretty close in some places, especially in Ontario. 

The report noted that there are additional economic conditions that influence today’s market, such as home-price growth, which has outpaced rents since 2012, but that low interest rates help offset this advantage for the rent side.

Usually, when Trulia crunches its home-buying numbers, it assumes a 30-year, fixed-rate mortgage with a 20 per cent down payment for households moving every seven years. Following these guidelines, buying is 36 per cent cheaper than renting on a national basis, based on September home prices.

But the issue with this model is that it doesn’t fit the situations that average millennials face, according to Trulia. Instead, the company said that it is typical for young households (ages 25-34) to move every five years and only be able afford up to a 10 per cent down payment. Trulia also assumed a 3.85 per cent mortgage rate on a 30-year fixed-rate loan, itemized federal tax deductions and a 25 per cent tax bracket.

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For agents outside the city limits of Toronto who have watched colleagues lose deals over the city’s land transfer tax, news that the provincial Liberal government may be set to give all municipalities the same powers has rocked the real industry to the core.

According to news reports, the Liberal government may be set to give all municipalities the right to set the amount of municipal land transfer tax you are required to pay when buying a new property, something that currently only the city of Toronto is allowed to do.

“Ontario home buyers are already charged a provincial land transfer tax, so by adding a municipal tax, they’re essentially doubling the tax burden on Ontario families,” said Patricia Verge, president of OREA, in a statement. “If the Ontario Liberals follow through with this plan, homebuyers will be forced to pay $10,000 in total land transfer taxes on the average priced home in Ontario, starting as early as next year.”

OREA also warned that if all municipalities province-wide were allowed to set their own tax rates, it will result is lost economic activity and lost jobs with the association. They accused the Wynne Liberals of breaking an election promise.

They say that a letter received last year during the election said that Liberals “had no plans” to extend these powers beyond Toronto.

The minister of municipal affairs and housing denied any decision has been made to extend the taxing power.

“In 2014 at the AMO conference, I was asked whether I would consider looking at municipal revenue tools as part of the Municipal Act review. I gave the shortest answer possible, ‘yes.’ We are currently reviewing the Municipal Act. No decisions have been made,” said Ted McMeekin.

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Every year close to 100,000 people from all over the globe begin a new life in Toronto, and as a result, ours has become one of the most culturally diverse cities in the world.

Fortunately, when it comes to housing, the choice is as diverse as the population itself.

Within the Greater Toronto Area it is possible to live on a farm, by a ski slope, on an island, near soaring cliffs and even down the street from a castle, which only begins to illustrate the seemingly limitless range of our city’s more than two million housing options.
 

Toronto’s castle is of course, the historic treasure known as Casa Loma (Spanish for Hill House), which took three years and $3.5 million to construct when it was begun in 1911. It’s a cost that might now be considered modest in comparison to some homes in the area, which reflects the long-term benefit of most any type of real estate investment.

While the castle’s towers offer an outstanding view of the downtown core, spectacular vistas can be found from numerous vantage points throughout the GTA. The Scarborough Bluffs for example, offer a view from 300 feet above the city’s eastern shoreline. In this neighbourhood, detached homes are the most commonly found housing type. However, if you want to be steps from beaches and boat docks, there are also numerous condominium options along Toronto’s 46 kilometres of waterfront.


Lakeside living can also be found along many of the smaller lakes that dot the GTA’s surrounding regions and if taking the lifestyle a step further appeals to you, follow the Don Valley Parkway/Highway 404 combination to the northern reaches of York Region where you can find land lease properties on islands near the southern shores of Lake Simcoe.

If winter is the season you prefer, consider that there are housing options near two ski slopes within the city limits: Earl Bales Park and Centennial Park, and still others available by driving a short distance east or west across the 401, which incidentally, is one of the world’s most travelled highways.


If country living is your ideal, you can find more than 3,000 farms throughout the GTA, with the majority being in Durham Region. Although farm land is still available in the city’s surrounding regions, the incredible pace of development has brought a myriad of other options to these areas as well, including high rise condominiums, townhomes, semi-detached and detached properties at various price points, and even custom designed estates.

This is just a snapshot of the many lifestyle choices available throughout the GTA. You can also choose to live within steps of the ecological wonders of High Park, near film and television soundstages in Leslieville, or amongst North America’s best-preserved collection of Victorian-era industrial architecture in the Distillery District, to name just a handful of more choices.


To learn more about the GTA’s range of housing options, talk to a CHABA.

EMAIL: CHABA@ILOFTU.CA

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