B.C. Government's decision to implement a new 15 per cent tax on Vancouver area residential properties bought by people without permanent residency is the hot topic in Canadian real estate world these days. It's scary when government's get involved in the market and it's even scarier when they implement the decision in a week!
Richard has talked to Tamsin McMahon of The Globe and Mail and shared his views of the situation and what this could mean for the Toronto market. The article got featured on the home page!
If Toronto does not go the way of the tax, yes you are going to get more people coming to Toronto.
Mr. Silver is monitoring a handful of deals involving sales of overseas buyers in the Toronto area that are not set to close until later in the fall.
My sellers who have sold their properties to offshore buyers are going to be nervous. I would suggest to any politician right now: Let’s see what happens with Vancouver because it doesn’t make sense to go down the road [of a foreign-buyers tax] and then all of a sudden have to completely turn and pull back on it.
Both Toronto Mayor John Tory and Ontario Finance Minister Charles Sousa have said they will be closely watching the effects of B.C.’s tax, which came with little warning. In an effort to get ahead of the debate, the Toronto Real Estate Board, which opposes a tax, has said it plans to publish the results of a survey of its membership to gauge the extent of foreign investment in the Greater Toronto Area.
The increased focus on international investment in Canada’s housing market comes as prices for detached homes in the City of Toronto rose 20.7 per cent in July, to an average of more than $1.2-million. In the suburban “905” region, prices for average detached homes hit $888,565, up almost 22 per cent from last July.
The market frenzy was not limited to detached properties. Townhouses and semi-detached homes also saw double-digit annualized price gains in July. Condo prices rose more than 9 per cent from the same month last year, to $406,865. Average resale condo prices jumped 13 per cent in the 905 region and 8.2 per cent in the 416 area.
Even as the number of house sales rose slightly in July from the same month last year, resale listings fell almost 14 per cent in Toronto and dropped slightly more than 3 per cent in the suburbs. A severe shortage of listings in the face of strong demand has some industry observers urging local governments to increase housing supply rather than restrict foreign investment. “Housing policy is now top of mind for all levels of government,” said board president Larry Cerqua in a statement. “Policy-makers need to be focusing on solutions to the sustained lack of low-rise inventory throughout the GTA.”
Homeowners are cautious about selling and becoming buyers in Toronto’s hyper-competitive market, exacerbating the shortage of homes for sales, Mr. Silver said
There are not a lot of listings and part of the reason is prices are very high. If you don’t have to buy, then you don’t move. So even though prices have gone up, there’s a lot of people who are in a holding pattern.
Read the whole article here.