The fall is officially coming this week and we are all wondering what it will bring to Toronto's real estate market. Here we've put together the most important news from the GTA housing market to help you get a better idea of what this season is going to be like.
The Globe and Mail: Toronto housing market feels effect of foreign-buyers tax
Purchases of Toronto homes by foreign buyers dropped over the summer after a new tax in Ontario began targeting international property investment, falling from 7.2 per cent of sales in May to 5.6 per cent of homes sold over the three months ending in August. The question now is whether Ontario's new 15-per-cent foreign-buyers tax is itself responsible for the slide or if the psychological effects of the tax shook the market.
Richard Silver from Torontoism was featured in the article saying the new tax "shocked the marketplace" and gave international buyers reason to pause. "Whenever a tax like that is implemented, people sort of pull back and they wonder what's going to happen and also what it means in terms of are they welcome to invest in Canada and I think that's sort of taking people aback," said Mr. Silver. Despite the tax, however, the prices are affordable for people whose funds are in U.S. dollars, given the exchange rate.
BuzzBuzzHome: The GTA housing market’s correction in 10 facts
Following the TREB market numbers for August, the BuzzBuzzHome named the 10 facts that show how the GTA’s housing market is working through a correction. Here we present only some of them. Firstly, the average price of a detached home stayed almost the same as a year ago. The detached home prices went down almost 20 per cent since their peak in April in eight of GTA's municipalities.
However, the condo market continued to show resilience: the average price of a unit was $507,841, up 20 per cent annually. Condo prices were also up from the previous month’s average of $501,750. On average, GTA home stayed on the market for 25 day, whereas in August last year the house was sold in around 18 days. Finally, the number of sales slightly increased from 5,921 in July to 6,357 in August.
Canada's condo boom continues to surprise, with groundbreaking in Toronto still going strong even as prices of detached homes in Canada's largest city slump, but recent rate hikes and rent controls are likely to cool condo prices by 2018. Developers and economists say condo prices cannot keep rising at such a pace, in part because it was their relative affordability compared to single-family homes that fueled the boom in the first place.
While prices may cool, the scarcity of land on which to build detached houses will continue to fuel the condo building boom. The health of the condo market is critical for Toronto. So-called multiple unit buildings account for about 40 percent of housing starts in Canada as a whole and about 53 per cent in Toronto. By 2018, more than 62 per cent of Toronto groundbreaking will be multiples.
Business Insider: Here's why Jeff Bezos should pick Toronto for Amazon's next HQ
Last week, Amazon announced that it will solicit bids from North American cities to be home to the company’s second headquarters, expecting to eventually house as many as 50,000 employees. The founder of Amazon Jeff Bezos is setting his sights beyond the US and there are some serious reasons he should pick Toronto to house Amazon’s next HQ. If this happens, it will have a remarkable effect on the economy and the attractiveness of Toronto for the tech talent. The housing market is also likely to be influenced by this.
Amazon is seeking a city of more than 1 million people with an international airport, mass transit, an educated workforce and a solid business climate with notable job growth. Toronto easily meets all of these criteria. As Trump’s harsh immigration policies drive tech workers out of the U.S., Trudeau is luring the world’s best and brightest to Canada with his open immigration policies.
One more news that is not directly connected to real estate, but might be crucial for the future of Canada’s housing market. The 2016 election, and Trump’s travel ban and what many see as the demonization of foreigners and immigrants and a new wave of racism, has created a post-Trump surge at Canadian colleges.
At the University of Toronto, the number of foreign students who accepted admissions offers rose 21 percent over last year, especially from the United States, India, the Middle East, and Turkey. Other universities across the country also saw record increases in the last year. Overall, the number of international students in Canada has grown 92 percent since 2008. They now make up 1 percent of the country’s population.