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CONTENTS march-april 2018 volume 05 issue 08 FEBRUARY REAL ESTATE INDEX
GTA DETACH AVG PRICES (2018 • $ 767,818 | 2017 • $ 876,363 | -12.38%) SALES (2018 • 5,175 | 2017 • 7,955 | -34.94%) 1 YR MORTGAGE (2018 • 3.34% | 2017 • 3.14% | +0.06%)
04 ................... Canada’s Household Leverage Is Not Abnormal - National Bank 04 ................... The Gap Between The Price Of A Toronto Condo And A Detached Is Closing Fast 04-05 ................... Ontario Regulator Probes Cryptocurrency Use In Real Estate 06 ................... B.C. Measures To Crack Down on Speculation Could Drive Foreign Buyers to Ontario 07 ................... 'Own Use' Evictions On The Rise In Toronto 08 ................... Rate of New Home Construction Across Canada Trending Stable 09 ................... Prices Had ‘Nowhere To Go But Up’ - Supply Shortage In Vancouver and Toronto 10-12 ................... 2018 Spring - March-April TanTeam Listings 12 ................... February 2018 GTA REALTORS® Release Monthly Resale Housing Figures 13 ................... The TanTeam Seminar Series 9 - Expecting The Unexpected In The 2018 Real Estate Market - Thursday, January 25th, 2018 14-15 ................... Craft Wines & Gifts Grand Opening Coming Soon! April 2018
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Canada’s Household Leverage Is Not Abnormal - National Bank EPHRAIM VECINA - HOME NEWS JANUARY 31, 2018
Toronto real estate prices have been diverging recently. Toronto Real Estate Board (TREB) numbers show that detached prices are falling, while condos are at an all-time high. This has pushed many people to ask, how expensive can a condo get – relative to detached prices. Condo prices are getting closer to detached homes, but currently the gap isn’t unusual compared to historic trends. Toronto condo prices are rising less quickly than they were last year, but are still making a huge jump higher. TREB reported a condo benchmark price of $469,800, a 0.34% increase from the month before. The annual increase works out to 19.88% higher than the year before. That’s in addition to the 17.94% increase the year before that. Yes, that means condo prices have increased 41.37% over the past years. A surreal amount, that even the CMHC has expressed concerns about.
that median, and 11.48% below the highest we’ve seen. In terms of relative value to a detached, a condo is far from the worst the worst value we’ve seen. Now, don’t read this information the wrong way, this doesn’t mean that condos are undervalued. Nor does it mean that detached homes are overvalued. The ratio can move in various directions, either higher or lower. This depends entirely on how fundamental price increases are moving. What we’re learning here is the relative value is no more unusual than it has ever been. Until recently, the gap was unusually large.
The Gap Between The Price Of A Toronto Condo And A Detached Is Closing Fast KAITLIN LAST FEBRUARY 21, 2018
Toronto real estate prices have been diverging recently. Toronto Real Estate Board (TREB) numbers show that detached prices are falling, while condos are at an all-time high. This has pushed many people to ask, how expensive can a condo get – relative to detached prices. Condo prices are getting closer to detached homes, but currently the gap isn’t unusual compared to historic trends. Toronto condo prices are rising less quickly than they were last year, but are still making a huge jump higher. TREB reported a condo benchmark price of $469,800, a 0.34% increase from the month before. The annual increase works out to 19.88% higher than the year before. That’s in addition to the 17.94% increase the year before that. Yes, that means condo prices have increased 41.37% over the past years. A
Condo prices are fairly low when compared to detached prices. The median ratio of a condo to a detached since 2005, has been 56.80%. The highest it’s ever been was 61.36%, which it reached in May 2009. Currently we’re 3.19% below
surreal amount, that even the CMHC has expressed concerns about. Condo prices are fairly low when compared to detached prices. The median ratio of a condo to a detached since 2005, has been 56.80%. The highest it’s ever been was 61.36%, which it reached in May 2009. Currently we’re 3.19% below that median, and 11.48% below the highest we’ve seen. In terms of relative value to a detached, a condo is far from the worst the worst value we’ve seen. Now, don’t read this information the wrong way, this doesn’t mean that condos are undervalued. Nor does it mean that detached homes are overvalued. The ratio can move in various directions, either higher or lower. This depends entirely on how fundamental price increases are moving. What we’re learning here is the relative value is no more unusual than it has ever been. Until recently, the gap was unusually large.
Ontario Regulator Probes Cryptocurr SHANE DINGMAN GLOBE AND MAIL FEBRUARY 22, 2018
Ontario's real estate regulatory body, the Real Estate Council of Ontario (RECO), is raising serious concerns about whether brokerages should be allowed to facilitate transactions in cryptocurrencies such as bitcoin. "RECO is currently reviewing the use of cryptocurrencies, such as bitcoin, in real estate transactions," says Daniel Roukema, senior adviser, external communications at RECO. "The decision to accept cryptocurrencies would be based solely on the law, our code of ethics and assurances that consumers will be safeguarded and no harm can come to people involved in buying and selling real estate in Ontario." The issue, according to Mr. Roukema, is that cryptocurrency can't be held in trust the way regular bank funds are during real estate transactions. The Real Estate Council of British Columbia has already banned real
estate professionals from processing purchases in cryptocurrencies. "RECO does not regulate buyers and sellers, and if a transaction were to occur between two parties without the involvement of a brokerage, it would be outside of RECO's purview to determine the legality or feasibility of that transaction," Mr. Roukema said in a statement. "RECO cautions buyers and sellers to take steps to protect themselves in real estate transactions and to seek legal advice when considering the use of cryptocurrency in a real estate transaction." At least one Toronto developer is offering to swap digital coins for property, in the form of a contract for a preconstruction condominium apartment. Condos.ca, an online real estate brokerage, is the marketing partner on a deal strung together with Toronto's Pensio Real Estate Group, Nationwide Rentsure Canada and a Bermudabased cryptocurrency company called Cryptonumus.io. Units in the Ellie
Condo at 5220 Yonge Street, being developed by G Group Development Inc., are being offered from 70 to 116 bitcoins (a moving target given the volatility of bitcoin), or starting at about $367,000. Seeking out bitcoin offers for a condo development is novel enough, but in an extraordinary first for Canada, Goran Alexander Vice President of PreConstruction Sales for Condos.ca says the preconstruction condos are being sold for full price in bitcoin, up front. "The traditional way is 20 per cent within a year and then the remainder on closing," says Mr. Alexander, who acknowledges he's never seen a cash transaction for a unit's entire value outside of the Asian market. "The only reason you'd buy up front so frontloaded is because of the volatility. These guys don't want to get stuck with bitcoin that's sinking." Indeed, since the highs of December when bitcoin commanded US$19,300 a token, its value has slipped by 47 per cent according to Coindesk.
An additional incentive to pull the trigger is the countdown on the Cryptonumus site, which tells potential buyers they only have a few days left to buy. The original promotion was only intended to last for two weeks. Cryptonumus and Pensio are also hosting bitcoin presales for projects in Kingston, Hamilton and Barrie.
"My pho with peo how the bitcoin," the pro virtual c people a into a t sense o
The biggest potential risk in the "swap" mechanism Cryptonumus employs is that if, for whatever reason, the transaction falls through in the future – either because a buyer wants to pull out or the project gets cancelled – what you get back is your original number of bitcoin. If bitcoin crashes, you will have missed out on an opportunity to have cashed in now for literal cash, and if bitcoin soars you could have pledged bitcoin worth far in excess of the eventual closing cost.
That sa not a ta yet.
While Mr. Alexander says his team has fielded multiple expressions of interest, a spokesperson for the Cryptonumus team said no one has actually gone ahead and swapped bitcoin for property yet.
The Ell parcel o A prev cancelle before c Then b refused ranged In 2017 pleaded breach o 3 1/2 y charges dropped
rency Use In Real Estate
one has been repeatedly ringing ople wanting to know more and ey can unload their position in " says Mr. Alexander, who sees omotion as a way to hedge currency with property. "It gives an opportunity to exit and get true tangible asset that has a of security."
aid, a preconstruction condo is angible asset; it doesn't exist
lie project is proposed for a of land with a troubled history. vious developer, Centrium, ed its plans for the site in 2014 construction began. buyers claimed the developer d to return their deposits, which from $40,000 to $700,000. 7, Toronto lawyer Meerai Cho d guilty to one charge of criminal of trust and was sentenced to years in custody, although 142 s of fraud over $5,000 were d.
ering also highlights the ways
the Canadian financial system has yet to prepare for large-dollar transactions in cryptocurrency being funnelled through anti-money laundering rules or the real estate industry's "knowyour-client" rules. "Real estate developers, brokers and sales representatives must fulfill specific obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and associated regulations to help combat money laundering and terrorist financing in Canada. These obligations include establishing a compliance program, client identification, record keeping, ongoing monitoring of business relationships, and reporting certain types of transactions to FINTRAC," says Jamela Austria, a spokesperson for FinTRAC. The rules are clear that an agent who receives $10,000 or more in cash (in a single or multiple transaction in a 24-hour period) must send FinTRAC a report within 15 days. What's not clear is whether bitcoin, which has many of
the difficult-to-trace elements of cash, counts as a suspicious transaction and must be immediately flagged to FinTRAC. Some of the best-in-class data companies working with financial authorities in the United States say they are much further along identifying whether bitcoin comes from criminal actors (based on identifying clusters of bitcoin wallets connected to the so-called dark web) than they are in tracking money launderers.
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B.C. Measures To Crack Down on Speculation Could Drive Foreign Buyers to Ontario JANET MCFARLAND GLOBE AND MAIL FEBRUARY 12, 2018
New real estate measures in British Columbia could be an incentive for Ontario to match the moves or risk seeing more speculators turn their sights to Toronto as a more attractive investment location. The B.C. government unveiled a package of reforms on Tuesday in the provincial budget that increased its foreignbuyers tax immediately to 20 per cent from 15 per cent, and extended it to other parts of the province. B.C. also announced a new tax – 0.5 per cent in 2018, and then 2 per cent in the following years – that homeowners who do not pay income tax in the province will be charged annually. Canadian Imperial Bank of Commerce economist Benjamin Tal said the moves will steer more foreign buyers to Toronto and give the Ontario government motivation to boost the rate of its own foreign-buyers tax from 15% to 20%. “It would open the door and give Ontario a good excuse to raise the tax to 20 per cent, because you have a race now to the top,” he said. “I think the temptation will be there.” Mr. Tal said he believes foreign-buyers taxes have no major impact on many overseas investors, who see them as a cost of doing business. But he said politicians are becoming attached to the tax as a growing new revenue source to fund social-housing projects. “Even if you don’t slow down the market, you get something out of it,” he said.
The new measure, which the B.C. government is calling a “speculation tax,” will include Canadians living in other provinces. Principal residences and long-term rental properties will be exempt, encouraging investors to rent homes rather than keep them vacant. The tax rate in 2018 will be $5 for every $1,000 of assessed property value, or 0.5 per cent, but will rise to $20 per $1,000 of value, or 2 per cent, by next year. Josh Gordon, assistant professor of public policy at Simon Fraser University, said the details of the new tax will be crucial in determining its impact. The B.C. government said it will apply to homes occupied by “satellite families,” typically spouses or children, while the main income-earner works elsewhere and pays little or no income tax in B.C. The province has not unveiled detailed rules about how it will define satellite families or how stringently it will apply the tax, which Prof. Gordon said will determine how many foreign buyers bypass Vancouver in favour of Toronto. “I think there’s no doubt that some money will leave Vancouver and land in Toronto,” he said. “The question is how much. And depending on the design of the tax, it could be substantial.” Economist Robert Kavcic of Bank of Montreal said the tax could have more impact than the foreign-buyers tax because it will be paid annually based on the value of a house. It would total $100,000 a year on a $5-million home in Vancouver, for example.
“If you’re looking at Vancouver versus Toronto as a foreign investor, you’re paying 5 per cent less to get in on the same priced house in Toronto and you’re also saving 2 per cent a year,” Mr. Kavcic said. “So if you just want capital in the country … then Toronto is cheaper.” A statement from Ontario Finance Minister Charles Sousa’s office said the province’s current rules are working. “We will continue to monitor the housing market to ensure everyone in Ontario who wants to buy or rent a home has the opportunity to do so,” it said. “However, recent data suggests that our current plan is working: Nonresident speculators have decreased, average home resale prices have moderated and the housing supply has grown steadily.” Mr. Kavcic said Montreal will be even more appealing than Toronto because it has no foreign-buyers tax and will likely see more investment because of Vancouver’s tax changes. “Anecdotally, we’ve already seeing quite a bit of activity shift over to that market,” he said. Despite the tax gap, Mr. Kavcic said it is too soon for the Ontario government to match B.C.’s moves, as the housing market in the Toronto region is still recovering from the introduction of the foreign-buyers tax last April. Average prices for detached houses in the Greater Toronto Area are still falling on a month-over-month basis and have not stabilized, he said. “In Vancouver, we saw the market stabilize and start to push higher again, and Toronto is still undergoing a
correction,” he said. “So I don’t think it’s as critical right now.” Phil Soper, chief executive officer of Royal LePage, said the Ontario government risks triggering a major market correction if it adds more policy changes while the Toronto market is still adjusting to tougher new qualification rules for mortgages that took effect on Jan. 1. Most of the impact of the foreignbuyers tax came from Canadians who feared its effects, Mr. Soper said. More new taxes would create even greater psychological uncertainty in the Toronto market, he said. “Taking another swipe at demand and pulling more people out of the market could risk a hard correction and a steep decline in home prices, which would have wide and dangerous implications for the economy over all,” he said. “The big difference between Ontario and B.C. right now is that B.C. has moved through their correction and home prices are in danger of escalating too rapidly again, whereas in Toronto, we don’t have any situation like that. We could in 2019, potentially, but it’s a very different market in B.C. and Toronto right now.”
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'Own Use' Evictions On The Rise In Toronto SHANE DINGMAN AND TOM CARDOSO GLOBE AND MAIL MARCH 1, 2018
More Ontario renters are being served with eviction notices that suggest the landlord intends to occupy the unit for his or her own use – and the trend is accelerating, according to new data obtained by The Globe and Mail. Data provided by the Social Justice Tribunals Ontario (SJTO) show the number of eviction applications that include an N12 notice – signifying that the landlord, a purchaser or a family member requires the rental unit – has almost doubled over the last five years. The rapid rise in the serving of these notices coincides with a market stressed by rising rental prices and falling vacancy rates, and the 2017 expansion of the provincial rent control regime means that landlords have fewer tools to raise rents on existing tenants. Among rental housing advocates, this is seen as a tactic used in bad faith, where the landlord never intends to make personal or family use of the unit and simply intends to put it back on the market for higher rent or to sell it. "For us, the No. 1 eviction call used to be people that couldn't pay the rent. What happened last year, for the first time, they were overtaken by landlord's own use," says Geordie Dent, executive director of the Federation of Metro Tenants Associations. The data show the vast majority of all landlord eviction applications are for non-payment of rent – 68 per cent according to the most recent SJTO annual report. All the other types of evictions, including landlord's own use made up 12.4 per cent of applications in 2015-2016. But the share has been growing: "other" accounted for 9.9 per cent in 2013-2014. The growth in use of the N12 helps to explain that shift. In 2012, there were 1,542 "Applications to End a Tenancy and Evict a Tenant ," referred to as an L2, that included an N12 (often landlords include more than one type of notice in an L2, and The Globe's figures capture instances of multiple notice filings). In 2017, that number hit 2,928, an 89.8-per-cent increase. These applications have become more common in the past few years as the vacancy rates in Toronto's rental market dropped. In 2016, the rate fell to its lowest in 15 years, hitting 1.3 per cent according to Canada Mortgage and Housing Corp. figures. In 2017, vacancy hit 1.1 per cent. Meanwhile, N12 applications are up 50 per cent from 2015, and up 23 per cent year-overyear from 2016. The Globe first identified the rising trend in "own use" evictions in 2017 by combining call log data from Mr.
Dent's group with eviction applications. These new data confirm the trend and show that the highest volume of N12 applications came in the month prior to the passage of the Ontario government's Fair Housing Plan rental reforms and for four months afterward. In Facebook groups such as Ontario Tenant Rights, which has gained 3,100 members in the eight months since it was created, people who have been served N12s scramble to figure out how to interpret the new rules for tenancy and eviction, some of which only took effect as of Sept. 1, 2017. "We're getting more people that are saying, 'I'm getting an N12.' Our first comment is, sit back and wait for the actual notice of hearing. A notice is only a notice; don't throw a fit, don't pack your bags – you're not going anywhere," says Rob Maguire, a retired restaurauteur and administrator of the group who spends long hours reviewing provincial statutes and Landlord and Tenant Board (LTB) decisions. Mr. Maguire's advice points to an issue in understanding the scope of use of N12s in the province: Landlords can download and print off their own N12s. Delivering them to a tenant doesn't create a record with the government. In Mr. Maguire's experience, many tenants assume the notice itself is legally binding – or a sign that they had better move – and they never contest the filing. "There's a lot of landlords out there that think the N12 is the be-all and end-all, just as there are tenants that think that way. They don't even realize that they have to file to get an eviction order," he says.
2015 and 2016's totals. One possible explanation is that since last Sept. 1, tenants have been entitled to a month's rent in compensation for vacating a unit for the landlord's own use. Jim Murphy, chief executive officer of the Federation of Rental-housing Providers of Ontario, mostly deals with owners and managers of large-scale buildings. In the months following changes to the eviction rules in Ontario, he has fielded a higher volume of questions from smaller landlords. He says there are questions and some frustration from owners trying to figure out how to work within the law; that the expansion of rent-controlled rate increases to properties built after 1991 now removes a lot of the flexibility smaller landlords once had. "I don't know how, when you have a small investor that has one or two units in a condominium, if there's a large increase in the monthly maintenance fees, say to cover the garage, can you pass that along?" says Mr. Murphy. Whether the increase in N12 evictions
The documented cases involving an N12 that The Globe has analyzed only represent those cases where that second step is taken and a landlord files an L2 eviction with the LTB. It's impossible to know how often tenants get served with an N12 that they don't contest. The only other data point available is the number of times the forms are been downloaded from the government's website. Data from the SJTO shows N12 forms were download 57,662 times in 2017, which is about 14 per cent of all downloads for eviction notices. Only three of the eight other notice forms are more frequently downloaded: 59,869 for N11 ( agreement to end the tenancy), 62,494 for N5 (notice to end a tenancy for interfering with others, damage or overcrowding) and 120,698 for N4 (non-payment of rent), which accounts for 30 per cent of all downloads. As 2017 progressed, the number of new N12 applications slowed along a predictable seasonal curve, and in the months after September, rates of new applications actually fell below
is related to the reduced flexibility landlords once had is unknown. It is against the law to act in bad faith and declare "own use" as an excuse to evict rent-controlled tenants and bring in new tenants at a new rate. Breaking those rules also carries significant financial penalties: tenants can be entitled to recoup moving expenses in some cases, and if their new rent is higher, they can receive compensation for the difference. Last Nov. 8, a hearing at the Whitby, Ont., LTB, a landlord (whose identity was redacted) had served an N12 to tenants before Sept. 1, 2017. Landlords who evict by way of an N12 are supposed to stay in the unit for a minimum of one year, and if challenged by a tenant they have to show a good faith reason for not doing so. In the Whitby case, a for sale sign went up on the lawn about eight days after the tenants left. Before they were evicted, the tenants were paying $900 a month; in their new rental they were paying $1,500. The LTB adjudicator ruled the landlord would have to pay for a year's worth of rent differential, or $5,400.
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Rate of New Home Construction Across Canada Trending Stable CMHC - FEBRUARY 8, 2018 Latest data from the Canada Mortgage and Housing Corporation showed that nationwide housing starts remained steady at 224,865 units in January 2018, compared to 226,346 units in December. The trend measure is a 6-month moving average of the monthly seasonally adjusted annual rates of housing starts.
The standalone monthly SAAR of housing starts for all areas in Canada was 216,210 units in January, virtually similar to the 216,275 units in December. The SAAR of urban starts increased slightly by 0.2% in January to 198,400 units. Multiple urban starts held steady at 134,685 units in January, while singledetached urban starts increased by 0.6% to 63,715 units.
“This reflects higher starts of multiunit dwellings in urban centres in recent months, which has offset lower starts of single-detached homes,” CMHC chief economist Bob Dugan said. In Vancouver, starts for all home types trended up in January (2,599 units), reaching a pace nearly double that of the same month last year (1,334 starts). “The North Shore was a particular hotspot
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for activity this month as a number of condominium and rental multi-family units got underway,” the report noted. Meanwhile, Toronto saw housing starts trend lower for the second straight month, with an increase in apartment starts partially making up for the decline in single-detached housing starts. “Increased supply in the resale market has resulted in less demand for new singledetached homes. New condominiums remain in high demand as home buyers flock to relatively lower priced homes, and investors seek to capitalize on low vacancy rates and increasing rents.”
Prices Had ‘Nowhere To Go But Up’ Supply Shortage In Vancouver and Toronto NAOMI POWELL - NATIONAL POST FEBRUARY 8TH, 2018 Home construction in Toronto and Vancouver failed to keep pace with surging demand between 2010 and 2016, leaving prices with “nowhere to go but up,” according to a new report from Canada’s federal housing agency. Home prices soared 40 per cent in Toronto over the period examined and 48 per cent in Vancouver.
“When you have weak supply responses, as you do in these markets, prices have nowhere to go but up.”
While conventional economic factors such as population growth, migration to cities and low mortgage rates were important drivers behind those increases - accounting for 75 per cent of the price jump in Vancouver and 40 per cent of the rise in Toronto - a “weak supply response” to surging demand was also a crucial factor, the report found.
“Large Canadian centres like Toronto and Vancouver are increasingly behaving like world-class cities,” said Aled ab Iowerth, deputy chief economist at the CMHC. Data gaps have prevented the federal housing agency from fully understanding what’s behind the supply shortfalls in Toronto and Vancouver or why they have grown so vast in comparison to Calgary, Montreal and Edmonton. Supply responses were stronger in each of the latter three cities and price increases were more modest. “What seems to be happening in Calgary and Edmonton is when demand comes along, the cities are spreading horizontally, so there’s a bit of sprawl going on,” Aled ab Iowerth said. Montreal already has a large rental sector, a greater comfort living in denser housing, and more readiness to convert industrial land to other uses, he added. In Toronto and Vancouver, a number of factors including the availability and price of land have prompted supply efforts to shift away from single detached houses and toward condominiums and more expensive highend homes. These market forces have coincided with municipal and provincial policies encouraging increased housing density. Though the objective is to combat urban sprawl, “densification … needs to
increase the supply of all housing,” the report states. The supply problems in Toronto and Vancouver are largely due to government policy interventions that focus on the demand side of the housing market equation, said Benjamin Tal, deputy chief economist at CIBC World Markets Inc. Ontario and British Columbia have introduced measures to cool markets in Toronto and Vancouver, including taxes on foreign buyers. New stress testing rules, making it harder to qualify for mortgages, were brought in earlier this year by the federal Office of the Superintendent of Financial Institutions (OSFI).
next 10 years.” Even though official data suggest the involvement of foreign investors in Toronto and Vancouver housing markets is limited, their “perceived impact” could be influencing the prices buyers believe they should pay for a home, the CMHC report stated. A survey by the agency found that 52 per cent of buyers who purchased a home in these cities believe foreign buyers are having an influence in those cities.
“We’re using demand tools to fight supply issues,” Tal said. “It is lagging way behind.” Tal pointed to Ontario’s Places to Grow Act, which sets out land-use planning and development rules for the Toronto region up to 2031, as “the No. 1 reason home and land prices are going up in the Greater Toronto Area.” Under the policy, land is released based on projected population growth and density targets. Ontario is 40 per cent into that trajectory, but implementation of the plan is 10-per-cent behind, he says. “This, in my opinion is the dominant issue. Vancouver has a geography problem. It’s an island, basically, and there’s no room to build, but Toronto has a policy problem and supply will only get worse over the
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February 2018 GTA REALTORS® Release Monthly Resale Housing Figures TORONTO REAL ESTATE BOARD MARCH 06, 2018 Toronto Real Estate Board President Tim Syrianos announced that Greater Toronto Area REALTORS® reported 5,175 residential transactions through TREB’s MLS® System in February 2018. This result was down 34.9 percent compared to the record 7,955 sales reported in February 2017. The number of new listings entered into TREB’s MLS® System totaled 10,520, a 7.3 per cent increase compared to the 9,801 new listings entered in February 2017. However, the level of new listings remained below the average for the month of February for the previous 10 years. “When TREB released its Outlook for 2018, the forecast anticipated a slow start to the year compared to the historically high sales count reported in the winter and early spring of 2017. Prospective home buyers are still coming to terms with the psychological impact of the Fair Housing Plan, and some have also had to reevaluate their plans due to the new OFSI-mandated mortgage stress test guidelines and generally higher borrowing costs,” said Mr. Syrianos. The MLS® Home Price Index Composite Benchmark was up by 3.2 per cent on a year-over-year basis for the TREB market area as a whole. This growth was driven by the apartment and townhouse market segments, with annual benchmark price increases of 18.8 per cent and 7.5 per cent respectively. Single-family detached and attached benchmark prices were down slightly compared to February 2017. The
overall average selling price for February sales was down 12.4% year-over-year to $767,818. However, putting aside the price spike reported in the first quarter of 2017, it is important to note that February’s average price remained 12 per cent higher than the average reported for February 2016, which represents an annualized increase well above the rate of inflation for the past two years. “As we move further into the spring and summer months, growth in sales and selling prices is expected to pick up relative to last year. Expect stronger price growth to continue in the comparatively more affordable townhouse and condominium apartment segments. This being said, listings supply will likely remain below average in many neighbourhoods in the GTA, which, over the long-term, could further hamper affordability,” said Jason Mercer, TREB’s Director of Market Analysis. In recent submissions to the City of Toronto and other levels of government, TREB has argued that housing affordability must continue to be a priority. “It is encouraging that the City did not include demand-oriented tax policies in its Budget,” said Mr. Syrianos. “TREB believes that all levels of government need to collaboratively develop solutions to increase the supply of housing, especially the ‘missing middle’. This was noted in our 2018 Market Year in Review and Outlook Report, which calls for more ‘gentle density’, including housing types like semi-detached houses, townhouses, multiplexes and apartments.”
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Published on Mar 11, 2018