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Toronto Real Estate Community Set for Big Welcome of Vancouver Real Estate Investors
TREB’s monthly market report showed 9989 homes were sold in Toronto (GTA) in July, which was one of the best July’s on record. Data is is suggesting 2016 will be a record year (It was!). TREB has just released its August sales report (Sept 7) and sales were strong and housing stock is slim which isn’t much of a surprise. 9814 homes were sold in the TREB MLS zone.
Here’s a snippet from their Sept 7, news release:
The MLS® Home Price Index (HPI) Composite Benchmark for August 2016 was up by 17.2 per cent on a year-over-year basis. Similarly, the average selling price for all home types combined was up by 17.7 per cent on an annual basis to $710,410. Both the MLS® HPI benchmarks and average prices for low-rise home types were up by double digits percentage-wise.
August sales was a new record, up 17.2% from August 2015. Is this due to the exit of investment from the overheated Vancouver BC market to Toronto. Or is this just due to the constrained availability in Toronto and surrounding area such as York Region? What’s obvious about the Vancouver and Toronto markets is the degree of available land and developments are causing price pressures. Will BC and Ontario governments change their directions or will this severe pressure continue right through 2017?
Word is, that Ontario is considering an extra transfer tax (they already have enough taxes). We’ll be able to pay our carbon credit tax and extra transfer tax together?
Here’s a chart courtesy of TREB, showing price growth in the last year. Very big numbers which might make a number of Toronto homeowners get off the shelf about selling their home. Houses and condos sold for record prices and yet we’re not hearing as much lately about bidding wars? York region lead the way with the biggest gains (22%) in price. Are you a York region realtor? Why not check out my digital marketing and Real Estate Lead Generation services? I’d be happy to help you.
The Big Shift to Toronto
Toronto real estate agents, developers, builders, and financial companies must be in very good spirits knowing the number of sales will boom. Many foreign buyers search Google or Juwai for information on homes, and from the jump in visits to my pages, it seems interest is growing. Those realtors who are present on Google search are sure to see their inquiries and leads grow.
This chart courtesy of TREB covers the details of each MLS zone: (click to enlarge). Mississauga, Vaughan and Toronto Central remain the top districts in terms of value. Toronto’s C12 MLS district (Lawrence Park, Don Valley, St Andrew/Windfields) has the highest prices with an average composite price of $1,690,900 and a detached home average price of $2,054,800. Other Toronto districts had higher price growth, some over 32% year over year. Toronto MLS average prices have levelled off with volume down 30 to 40,000 dollars since the spring high season.
BC’s Foreign Buyers Tax is the Big News in August
The BC government voted to levy a 15% tax on real estate investment by foreign buyers and many believe this has caused Asian buyers to shift their focus eastward for homes and other properties and take their money with them. The forecast for the 2017 Toronto housing market was good before, but with this new influx from Vancouver, it may be a profitable fall season for realtors and builders.
The stats don’t support that Asian investment money is responsible for Vancouver’s housing boom, anymore than it was Toronto or Montreal’s improvement. Politicians are likely hoping the public will believe a symptom of Vancouver’s amazing success is the cause. Prices have slid in Vancouver, but it may do little to make housing affordable in BC. In fact, we have to wonder if the exodus of that money will depress Vancouver’s economy and optimism. When you try to suppress the spirit of a city, you could be in for a tough go. Many of the foreign buyers are buying because their children are attending schools in Vancouver. It will certainly make a lot of over-leveraged buyers nervous as well as many schools in BC (including UBC) who will lose these foreign students and tuition.
The Big Shift to Toronto
Toronto real estate agents, developers, builders, and financial companies must be in very good spirits knowing the number of sales will boom. Many foreign buyers search Google or Juwai for information on homes, and from the jump in visits to my pages, it seems interest is growing.
In a news story from inews880, Jordan Teperman, executive vice-president of Haven Developments in Toronto, said Toronto is seeing the effects of the tax.
“We really don’t know what the effect of it is yet, but I could tell you from the seven projects that we have on the go…we are getting a lot of calls from brokers out west saying they have customers that would traditionally invest in Vancouver and are coming to Toronto now because they feel it’s a safe heaven, and two, they are so taxed out in their foreign countries.”
Teperman also said a major developer his company works with said the figures could be as high as 60 to 70% of the volume of investors that could go to Toronto instead of Vancouver. That would certainly make the Toronto Real Estate market jump in August and September.
TREB doesn’t report mid-month sales any longer, so we’ll have to wait another 7 to 10 days to see what the Vancouver impact is. What needs to be looked at further is how many sales will move to the US markets such as Los Angeles.
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