Timing is everything!

Timing is everything!

Last week the Government of Ontario introduced 16 points that it is bringing forward in the next Provincial budget tailored, in their mind, to dampen the activity in the GTA Real Estate Market.

Their timing is perfect, not only because we will soon be heading into a Provincial Election but their announcement comes at the beginning of May, a time when a lot more properties come to the market. “Spring flowers bring for sale signs!” repeats yearly.

The increase in the number of listings will also help flatten the activity somewhat as it has been driven mostly by a scarcity of properties to sell. I assume that there will be a bit of a shock to the market as the NRST (Non-Resident Speculation Tax) seems to be not as drastic as the one imposed in BC. There are several exclusions however it is unclear now if those exclusions will be made by a rebate after the tax has been paid to the Government, by way of application after the fact. This could be a major factor for some buyers in terms of the amount they are willing to pay.

Also, if this move was targeted to the Mainland Chinese buyers, the recent introduction of more restrictions by the Chinese Government on funds leaving China will also play into the hands of the Ontario Government. They will happily take credit for slowing the market however, it does not solve the major problem. We need to really look at streamlined intensification of our cities providing much better services.

My thoughts for what they are worth.

2 Responses

  1. Jim Burtnick

    My Take:
    Interesting shift we have noticed in the market in last week.
    That is, less pressure on buyers to get into multiple offers – evidence is that we have noticed a number of listings that have had an offer date this week did not sell on offer night.
    A few things at play here:
    Fear in the buyers’ minds that prices have maxed out – thanks to the press and bubble talk
    Wynne’s Fair Housing Plan announcement last Thursday. Details of which will be in today’s budget. This has put a lot of buyers on the sidelines as they digest what this means and if it will have an effect on prices.
    Lastly and most importantly, more inventory hitting the market now that spring is here. More supply plus somewhat tamed demand.
    I am of the opinion that these factors will create a short term lull in the market but things will pick up steam, just like they are in Vancouver. Toronto is a way bigger metropolis and will chew this info up, swallow and move forward (Ontario’s economy is strong in Canada and Canada is looking pretty good within G7 – see: link to theglobeandmail.com).

    My take on all this?
    With the lull in the market currently, it is a good time to be a buyer now than it was previously in 2017 and likely better than it will be later in 2017.
    Regards,
    Jim

  2. John den Ouden

    Since the announcement I honestly haven’t seen much of a lull. I believe we won’t see as many competing offers, but the prices are not pulling back…and I don’t think they will. Prices leveling off would be ideal. It’s unfortunate the Liberal created the largest Greenbelt on the planet back in 2005 which, in my opinion, was the start of the upward pressure on land prices. I look forward to more inventory.

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