While the recent changes to federal rules governing mortgages have been intended to moderate Canada’s most overheated housing markets, recent figures from the Toronto Real Estate Board indicated that GTA real estate activity is showing no signs of stopping any time soon.
In a November 28 press release, Alex Moloney and Franco Dinatale of Right at Home Realty Brokerage Inc.’s Toronto House Team noted that a major contributor to the city’s market strength is the imposition of the 15 per cent foreign home buyer’s tax in British Columbia earlier this year.
“It had caused Vancouver home prices and sales numbers, especially for high-end detached homes, to slide. As foreign buyers leave Vancouver to avoid paying the 15% tax in B.C., they are turning to Toronto to invest their money in real estate, including luxury single-family homes and condos,” Moloney explained.
Data from TREB showed that GTA home sales in October increased by 11.5 per cent month-over-month, up to 9,768 units. The average selling prices for all housing types spiked more dramatically, up by 21.1 per cent month-over-month to $762,975.
However, Moloney cautioned that it’s still too early to conclude if the new rules or the closure of capital gains loopholes are indeed ineffective.
“It remains to be seen whether any of the measures introduced by the Federal government will have any impact on the Toronto housing market over the long term.”
“Stricter stress tests and mortgage requirements may postpone, and even prevent, some low-income first-time buyers from entering the market, but I don't see it causing much of a ripple,” Moloney concluded. “There are way too many positive factors at play driving Toronto real estate. Our biggest problem right now, is that there are more buyers than listings.”
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