Like a roller coaster, it was a ride that went way up and then way down.
The good news is the Greater Toronto Area’s housing prices and sales overall are still up. The bad news: no one knows how this market will settle itself, now that the wild ride is over.
But the Toronto Real Estate Board told us Thursday housing sales actually dropped more than 37% over June of last year.
“We are in a period of flux that often follows major government policy announcements pointed at the housing market,” explained Toronto Real Estate Board president Tim Syrianos. “On one hand, consumer survey results tell us many households are very interested in purchasing a home in the near future, but some of these would-be buyers seem to be temporarily on the sidelines waiting to see the real impact of the Ontario’s Fair Housing Plan (OFHP).”
But what is not clear is exactly how many foreign buyers are taking their chequebooks and going elsewhere, thanks to Premier Kathleen Wynne and her Liberal government’s new outsider OFHP real estate tax, which some believe poured cold water all over the once-booming, perhaps out of control, market?
It is assumed this is the reason for the original jump in price and the fall of it, yet the statistics don’t explain the whole phenomenon. For example, the provincial government says that from April 24 to May 26 of this year, the percentage of the 18,282 home purchases, 4.7% was from foreign money.
The problem is the number could be misleading since it comes, following Wynne’s April 20 announcement of a “non-resident speculation” foreign investor’s tax. What is needed is the percentage of foreign purchasers from the whole previous year – before the tax was announced – to get a true idea of what was driving the crazy market place.
It would also be interesting to know how many purchases were registered from people who live here, but were using foreign money. Many frustrated people in the GTA certainly are not confident that this market was pushed to out-of-reach levels by just 859 foreign buyers.
But whatever caused the prices to skyrocket, domestic home buyers and the foreign people or businesses who invest their capital here deserve to know exactly how this all happened.
How many situations developed where somebody purchased a home at peak value before the market crashed, but found their house wasn’t worth as much when it closed? How many decided to walk away from their deposits, with their property worth less than what they originally agreed to upon closing?
Still, TREB reports “June’s average selling price for all home types combined for the TREB market area was $793,915, representing a 6.3% increase compared to June 2016. Year-to-date through the first six months of 2017, the average selling price was up by 20.9% to $870,016.”
So, no matter what the numbers show, the GTA is still one hot real estate market.
Strap in for the next ride?