That\u2019s what Ontario Premier Kathleen Wynne says is the intention of the Fair Housing Plan, a package of 16 new measures designed to cool the housing market, introduced on April 20. She made the comments to reporters at Queens Park.<\/p>\n
\u201cWe\u2019re monitoring it closely. It is a sophisticated response to an overheating of the market and we\u2019ll see, over the coming months, what the impact has been.\u201d<\/p>\n
The rules, which include a tax on foreign buyers, real estate speculators, and potentially owners of empty homes, sparked a psychological shift in the market, as buyers choose to wait out the impact, and sellers worry they\u2019ve missed the most profitable boat. Toronto real estate<\/a> sales plunged 37.3 per cent year over year in June, a result closely linked to the changes.<\/p>\n These effects, combined with last week\u2019s interest rate hike from the Bank of Canada<\/a>, have industry pundits concerned it\u2019s too much meddling at once. \u201cLet\u2019s hit the brakes here,\u201d stated Tim Hudak, president of the Ontario Real Estate Association. \u201cLet\u2019s take a wait-and-see approach before any more demand interventions.\u201d<\/p>\n Toronto mayor John Tory is also in support of the province\u2019s cooling measures, saying the city’s market\u00a0is still healthy, despite the 15.1-per-cent year over year sales decline recorded last month. Speaking to Metro<\/em>, he said, \u201cToronto real estate investment is still, I think, an excellent investment for people, so those who bought a house sometime in the last year and a half, I don\u2019t think need to feel that they made a mistake.<\/p>\n \u201cThey didn\u2019t. They\u2019ve invested in a dynamic, growing city and I think that over time that will prove to be a very good investment, even though it\u2019s a huge amount of money for them to afford to buy a house in Toronto.\u201d<\/p>\n He feels the Fair Housing Plan has effectively calmed the market without \u201cunduly\u201d disrupting it, and improved conditions for buyers as price increases have slowed.<\/p>\n Tory\u2019s positive sentiments were echoed in separate comments made by Federal Finance Minister Bill Morneau, who told the Canadian Press<\/em> that action had to be taken in the country\u2019s biggest markets, where conditions were unsustainable.<\/p>\n \u201cWhat we\u2019ve put in place has had some impact \u2013 and some impact in having a slight cooling in the market, which of course was our objective,\u201d he said.<\/p>\n Our nation\u2019s capital has long been a sleepy real estate destination \u2013 but that has drastically changed, as increased buyer demand and tight supply put the squeeze on prices. The average cost of an Ottawa home rose 8.2 per cent to $432,864 in the second quarter, reports Royal LePage, a dynamic not experienced in the city in recent years.<\/p>\n \u201cInventory levels across Ottawa have radically changed of late, reaching three-year lows and dropping by more than 20 per cent compared to last year. In recent months, we have seen a Toronto-like effect with many buyers and not enough listings to go around. This dynamic is putting a lot of pressure on the region\u2019s home prices, in what is now decidedly a seller\u2019s market,\u201d said Hanna Browne, an Ottawa-based Royal Le page Team Realty broker.<\/p>\n The brokerage forecasts Ottawa prices will continue their ascent, to rise an additional 6 per cent to $439,332 by the end of 2017.<\/p>\n The June numbers from the Canadian Real Estate Association<\/a> reveal the Greater Toronto Area housing market\u2019s sales-to-active-listings ratio has dipped below 40 per cent \u2013 indicative of buyer\u2019s market conditions. A ratio between 40 \u2013 50 per cent is considered balanced, while over 60 is a seller\u2019s market.<\/p>\n Nationally, sales across Canada fell 6.7 per cent from May, and a full 11.4 per cent year over year. And, while the national sales price rose 0.4 per cent to $504,458, it is the smallest monthly increase recorded in seven years.<\/p>\n CREA President Andrew Peck says buyers are clearly hesitating to enter the market, choosing instead to observe how changes from the Ontario Fair Housing Plan, and\u00a0newly hiked interest rates, will play out.<\/p>\n \u201cCanadian economic and job growth have been improving, which is good news for housing demand. However, it also means that interest rates have begun to rise, which may impact home buyer confidence \u2013 particularly in pricier markets like Toronto and Vancouver, where recent housing policies had already moved potential buyers to the sidelines,\u201d he stated.<\/p>\n He adds that in lower-priced markets, such as the Hamilton condos<\/a> market, with already balanced affordability, the impact will be less felt.<\/p>\n Are Canadian homeowners drowning in their mortgage debt obligations? The Canada Mortgage and Housing Corporation intends to find out, with a new quarterly report on the state of credit and mortgage trends across the country. Based on data from Equifax, the first iteration reveals a positive trend in homeownership credit \u2013 though it\u2019s important to continue taking a \u201cvigilant\u201d approach.<\/p>\n According to the CMHC:<\/p>\n \u201cHousehold debt is a key concern for Canada\u2019s housing and finance systems,\u201d said CMHC Senior Statistical Researcher Maxim Armstrong. \u201cUsing data collected by Equifax, CMHC is able to provide reliable, impartial and timely information on credit trends and developments in Canada.\u201d<\/p>\n In the Federal Budget this past March, the Liberal government divulged it will commit $39.9 million over five years for StatsCan to undertake a foreign buyer study, as well as the creation of the Housing Statistics Framework, a database to collect in-depth data on homeownership and demographics.<\/p>\n Those efforts are finally underway, as a team of \u201cmore than 15 people\u201d has been assembled to create the database \u2013 and it\u2019s no small undertaking.<\/p>\n \u201cIt is a very challenging task,\u201d said Haig McCarrell, director of the Investment, Science and Technology Division at Statistics Canada. \u201cThere is data on the real estate market, but the problem is that it is inconsistent. A number of studies had been done, but with no conclusions, because of missing information.\u201d<\/p>\n The team will use existing census records as well as private and public partner sources to fill in those gaps. The resulting National Property Register will have information on every property in Canada, as well as who owns them. StatsCan will then leverage that data to create hard numbers on foreign buyers, average home prices, mortgage holders, vacant homes, and more.<\/p>\n The Federal government has come under sharp rebuke in the past for its lack of comprehensive housing and buyer data. Policy makers and critics have argued that without this information, it\u2019s impossible to regulate the market.<\/p>\n The database is scheduled for completion by the end of 2017, with priority for the Toronto and Vancouver real estate markets.<\/p>\n An American report from the National Association of Realtors finds that the number of Canadians buying U.S. real estate is on the rise, and that they\u2019re buying increasingly expensive properties in sunny vacation destinations like California, Arizona, and especially Florida. A total of US$19 billion was spent by Canucks south of the border between April 2016 to March 2017 \u2013 a doubled increase year over year.<\/p>\n According to the report, Canadian buyers, many of whom have downsized their family homes and are pursuing the snowbird lifestyle and investment properties, scored an unexpectedly large windfall from the sale of their home.<\/p>\n \u201cWe\u2019ve had such a dial up in prices. Canadians are selling homes for prices they never could have imagined and that\u2019s allowing them to buy vacation homes for prices they never could have imagined. They just have tons of free capital,\u201d said Janice Fox, broker at Hazelton Real Estate, to Mansion Global<\/a><\/em>.<\/p>\n A proposal to outright ban the practice of \u201cdouble ending\u201d \u2013 when an agent represents both buyer and seller in a real estate transaction and nets both commissions \u2013 has been opened up for public review<\/a> by the Real Estate Council of Ontario. It is the first of two phases to \u201cmodernize\u201d the rules for agents in the province, which critics say don\u2019t go nearly far enough to regulate unethical behaviour.<\/p>\nToronto Mayor Weighs in on Market<\/h2>\n
Ottawa Market Seeing \u201cToronto-Like\u201d Conditions<\/h2>\n
GTA Now a Buyer\u2019s Market: CREA<\/h2>\n
How Bad is Canadian Mortgage Debt?<\/h2>\n
\n
Statistics Canada to Build Massive Home Database<\/h2>\n
Canadians Double Spending on U.S. Real Estate<\/h2>\n
Should Double Ending Be Banned? Have Your Say<\/h2>\n