Toronto’s housing market drop is echoing Vancouver’s earlier plunge, but Canada’s most populous city may not bounce back so quickly as new rules continue to tighten access to home loans.
Canada’s two largest housing markets both saw a dramatic slide after a raft of regulations were instituted to tame runaway house prices. Benchmark price gains in Vancouver fell for 5 months after policy makers introduced a foreign buyers tax in August 2016 and began climbing steadily again early in 2017.
In Toronto, prices have fallen for 7 months since May and the market continues to cool, Bloomberg reported.
Read more: Toronto residential prices fall for 7th straight month
To be sure, Toronto has seen some signs of recovery in the past 2 months, with sales in December having the smallest yearly decline since the introduction of a foreign home-buyer tax in Ontario in April. Still, the market now faces a new hurdle as homebuyers who don’t take out mortgage insurance will have to qualify at higher rates.
Furthermore condo prices are taking off again in Vancouver, said John Pasalis, president of Realosophy Realty Inc. in Toronto. Prices for apartments in the coastal city were up 26% year-over-year in December compared with 14% for Toronto.
“Prices are still up but they’re not skyrocketing,” Pasalis said by phone late last week.
Demand spreading to communities surrounding major markets