Don’t blame overseas investors for the high price of housing in the Toronto area, tells the Toronto Real Estate Board (TREB).
The board has released new research stating fewer than 5 per cent of the 113,133 residential real estate transactions in the Toronto region in 2016 involved foreign buyers.
More than half of those foreign buyers were buying houses for themselves or to house own family members, according to a November, 2016 Ipsos survey of TREB agents, who acted as agents on behalf of those buyers.
About 25 per cent of the houses purchased by non-Canadians were bought as rental investments.
The data suggests that a foreign buyer tax such as the 15 per cent implemented in Vancouver last-place summer would be misguided, tells TREB.
A similar foreign buyers’ tax like in Vancouver here could have “unintended results” — potentially pushing up costs in communities outside the Toronto area where “they don’t have” such tax. It could also further reduce the tight supply of rentals and discourage immigration to the City, said the board.
The survey likewise found that fewer than 2 per cent of TREB realtors had acted in a sale in the Toronto area that was pushed east by the Vancouver tax.
The cost of a home in the Toronto region is expected to rise substantially — between 10 and 16 per cent — again this year in 2017.
That would expect the average cost of a home in December, 2016 of $730,472 would develop to $825,000 on average this year.
That cost was up 20 per cent in December, 2016 over the same month in 2015.
“Detached and semi-detached houses and townhouses will experience the most powerful annual rates of price growing, but the condominium apartment market segment will remain tight as well ,” mentioned a TREB press release.
An Ipsos survey of property buyers saw the average purchaser expects to put down 27.6 per cent on a dwelling this year, with first-time customers expected to put about 24 per cent down on their purchase.
While fewer customers are expected to buy a property this year in 2017 than was indicated in the previous survey, the number of first-timers expecting to enter world markets increased somewhat to 53 per cent from 49 per cent.
Buyers indicated they are using various sources for down payment including savings, RRSPs, gifts from family and equity from their existing homes.
TREB has said it expects a third consecutive time of more than 100,000 sales prediction but with slightly fewer this year in 2017.
The lack of supply is likely to be the most difficult impediment to those wanting to get into the market, mentioned TREB officials.
Active listings at the end of December, 2016 were at their lowest point since before 2000. It is unlikely that the shortage of listings will improve to any great degree in 2017,” mentioned Jason Mercer, the board’s Manager of market analysis.
TREB is also expected to release research showing that home values will rise as much as 12 per cent depending on their proximity to GO Transit’s Regional Express Rail betterments that are expected to provide 15 -minute, two-way service in many areas.
Source: Toronto Star
