Between the foreign buyer tax in Vancouver to the recent CMHC regulations to qualify for mortgages, the effect is starting to be felt.
The impact is being felt more dramatically in Vancouver where real estate deals with foreign buyers “plunged from 2,034 deals in the seven-week period before the tax, to 60 in the four weeks starting Aug. 2.” according to the CBC. (click here for the full article)
New mortgage regulations include stress tests to ensure buyers can afford mortgages even if rates increase. While this will have a positive impact to ensure the stability of the market, it is a blow to buyers who are currently in the market who now have to reduce their home buying budget.
To see the full list of regulations and how they will affect you, check out these two articles courtesy of the Globe & Mail:
Four major changes to Ottawa’s housing rules
Real estate reform: What you need to know about Ottawa’s overhaul
Inventory is still an ongoing issue and is the primary reason prices are being driven so high, but that has led to more creativity. For some time now, we have not been waiting for homes to come on the market – we have a number of strategies to help our clients find off-market homes that can also eliminate the stress of multiple offers.
While the goal of this new legislation is to ensure the stability of our market, the investment in real estate will continue to be a solid one in the long term so ensure you take that into perspective when the ‘bubble bursters’ start reporting that numbers are down in the coming months. Seasonally numbers will be going down anyway – it will be the year over year, historical comparisons that will show the true data and we’ll be sure to give you that analysis in the months to come!
TORONTO, ONTARIO, October 5, 2016 – Toronto Real Estate Board President Larry Cerqua announced that Greater Toronto Area REALTORS® reported 9,902 sales through TREB’s MLS® System in September 2016. This result was up by 21.5 per cent compared to September 2015.”
For the region as a whole, strong annual rates of sales growth were experienced for all major home types. The pace of detached sales growth was slower in the City of Toronto and the number of semi-detached sales was down compared to last year. In both cases, the year-overyear dip in new listings was likely the issue. “We continued to see strong demand for ownership housing up against a short supply of listings in the Greater Toronto Area in September.
The sustained lack of inventory in many neighbourhoods across the GTA continued to underpin high rates of price growth for all home types,” said Mr. Cerqua. Both the MLS® Home Price Index (HPI) Composite Benchmark and the average selling price for all home types combined were up strongly on a year-over-year basis in September. The MLS® HPI Composite Benchmark grew by 18 per cent compared to September 2015.
The average selling price was up by 20.4 per cent to $755,755. It is important to remember that the MLS® HPI provides a price growth measure for a benchmark home, thereby allowing for an apples-toapples comparison from one year to the next. The average selling price can be influenced by changes in both market conditions and the mix of homes sold.
“The Toronto Real Estate Board will be closely monitoring how the recent changes to Federal mortgage lending guidelines and capital gains tax exemption rules impact the housing market in the Greater Toronto Area. While these changes are pointed at the demand for ownership housing, it is important to note that much of the upward pressure on home prices in the GTA has been based on the declining inventory of homes available for sale,” said Jason Mercer, TREB’s Director of Market Analysis.