However good or bad the news are, there is always business to be had - says the team lead of Torontoism, Richard Silver. Last week we saw quite a lot of both. Here is our recap of last week's news for you to catch up with the real estate market trends, in case you missed some of them.
According to the Metropolitan Outlook: Spring 2017 released by The Conference Board of Canada, Toronto will have the strongest GDP growth among the 13 Metropolitan cities covered in the report, it’s GDP growth is expected to reach 2.6 per cent. The former leader, Vancouver, is on the second place as a cooling housing market limits its GDP growth to 2.4 per cent.
Toronto's economy had a big start to the year, driven largely by a booming housing market. The housing market is expected to cool down later on due to new measures introduced by the Ontario government to cool real estate price growth and improve affordability. Nevertheless, the forecast is that Toronto will still lead the country in economic growth this year.
After the government intervention in an attempt to tame the Ontario’s hot housing market, sellers are in a rush to list their property, trying to avoid missing out on the recent price gains. This is resulting in the buyers questioning their purchases and the sellers asking why their listings don’t attract the bidding wars that were taking place only a few weeks ago. Not satisfied with the lower prices, some homeowners are taking their properties off the market.
The new Ontario tax on foreign buyers and federal government moves making it harder to get a mortgage must have cooled down the market. Early data from the Toronto Real Estate Board confirms the shift in sentiment. Listings soared 47 percent in the first two weeks of the month from the same period a year earlier, while unit sales dropped 16 percent.
The baby boomers are buying the cottages on the lakes in Muskoka, Haliburton and Orillia: 50-somethings, cashing out and driving north to retire or telecommute. With the booming market in Toronto (although recently starting to cool down), selling a home is like winning a lottery, - one of the sellers says – after selling a home in Toronto he could buy a farm in Haliburton, no mortgage, and still money left in the bank.
The latest statistics show waterfront property sales up 5.1 per cent this year to date, compared with 2016. A lot of agents find a buyer and seller before the property even goes on the market. The inventory of listings is at historic lows — down about 30 per cent from 2015 levels. Muskoka doesn’t usually see such bidding wars, especially now, when it’s supposed to be a slow season.
Despite the recent remarks made by the millionaire Tim Gurner suggesting that millennials cannot afford buying a home because they spend too much on avocado toasts, buying a home is tough as a millennial. According to an HSBC study, the situation is disappointing everywhere in the world, except for China. Overall 40 per cent millennials own their homes, whereas in China 70 per cent of millennials are homeowners. The US and Canada are somewhere in the middle, with 35 per cent and 34 per cent respectively. Millennials in China are almost twice as likely to own a home than the average millennial in the other eight countries.
The global trend is that millennial first-time buyers tend to overspend. Over the past 2 years, 56 per cent of global buyers surveyed said they went over budget. Another trend is that millennials are likely to receive support from their parents, around 36 per cent of buyers used the help of their family.
A new report indicates Ontario doesn’t just need more housing – it needs the right kind of housing. The Greater Toronto Area is suffering from the “missing middle” or a lack of “gentle density” home types - townhouses, row houses, and courtyard apartments. These types of homes are supposed to bridge the gap between the luxury single-family housing and typical condos.
According to the report, which was compiled by the Canadian Centre for Economic Analysis, titled “Understanding Ontario’s Housing Affordability Challenge: A Big Data Evolution”, there is a clear imbalance between haves and have-nots as the majority of Ontarians are either over- or under-housed.