There’s no reason to panic, according to Toronto brokers, despite drastic sales drops in what was Canada’s hottest market mere weeks ago.
“I think there’s no reason to panic. I think what you have to do is take a real look at the market and if you’re buying long-term, realize you’re never going to buy at the bottom of the market,” Shawn Stillman, director and principal broker with Mortgage Outlet, told MortgageBrokerNews.ca. “If you find a place you like, definitely, people should still buy. But buy a lot smarter. Make sure there aren’t going to be any surprises with inspections and any other issues.”
Toronto home sales fell 20.3% in May, according to the Toronto Real Estate Board.
Prices, meanwhile, fell month-over-month from $920,791 in April to $863,910 in May.
The price declines have been noticeable, according to Stillman.
“I got back an appraisal today for a house that was bought on February 28. The person paid $1,065,000 in Burlington and the appraisal came back $190,000 below what they paid for it at $875,000,” he said. “The appraiser made a lot of notes saying that house was the top of the market (at the time) but since then there have been five sales all paying less than what my clients paid.
“There’s definitely stuff that is selling for a lot less than what people (would have) paid for them before the government made the rule changes.”
The Ontario government, of course, announced a suite of housing policies – including a 15% tax on foreign buyers – in its Fair Housing Plan in late April.
Those policies have contributed to cooling the market, brokers argue.
But that’s a good thing, some say.
“I think it’s been sort of a herd mentality reaction. The changes have caused a bit of a blip, a slowdown, and created more inventory. Which is great. It’s created a balanced market, which we needed. It was completely out of whack. I think it’s a great thing,” James Harrison, a broker with Dominion Lending Centres
, Home Capital Solutions, said. “I think there’s some great opportunity for buyers in the next few months. Come the fall, I think things will come back to reality.”
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