Speculation might not be behind overheating

Speculation might not be behind overheating

Speculation might not be behind overheating

Federal and provincial measures targeted at housing speculation will do little to improve affordability in Canada’s hottest residential markets, according to a new Bloomberg analysis that culled data from Teranet Inc.’s land and housing registry.

The latest numbers indicated that flippers represented only a miniscule proportion of home transactions in Toronto and Vancouver.

In Toronto, flipped condos accounted for a mere 1.8% of total sales for that housing type as of June 2018. This was far below the 4% rate a mere two years ago in April 2016.

Flipping “has always been a very rare occurrence” in Toronto, according to RE/MAX Integra regional director (Ontario) Christopher Alexander.

“Most people buy real estate to hang onto it for at least five to seven years,” Alexander told Bloomberg, adding that many short-term sales are due to life-altering factors such as sudden job changes.

Read more: Price growth a ‘progression of pain’ for red-hot markets – poll

Meanwhile, in Vancouver, only 3.4% of condo sales between April and June were those of units that have been previously sold over the past year – a marked contrast from the 5% proportion back in March 2016, which was some time before B.C.’s implementation of the 15% tax on foreign home buyers.

A noticeable market slowdown between then and now has made condo flipping far less enticing than it was, according to realtor Steve Saretsky.

“As soon as [prices] stop rising you get into a number of issues,” Saretsky said in a phone interview. “Are you really going to try to flip it in a down market? There’s no profit to be made.”