Posted 4.25.17 @ 0:0
The competition for GTA real estate is as fierce as ever, even though last month’s resale home listings increased by 15% compared to a similar period last year. The buyer competition is so fierce that it has driven up prices by 33% across the region compared to last year.
Toronto Mayor John Tory shared that the new TREB (Toronto Real Estate Board) statistics are worrying for people who are wanting to buy homes in the city.
GTA Real Estate is Still Red Hot
GTA’s average home price across all home types as a whopping $916,567 last month, a figure that is $228,556 more compared to last year. The average selling price for a detached home in the city of Toronto is $1.6 million.
In view of the above, mayor Tory says that effective action is needed to address the issue but TREB counters that any new policy decision must be based on empirical evidence and must be carefully assessed.
TREB’s director of market analysis Jason Mercer shared that there is no corresponding upward trend in the number of listings despite the evidence of a shortage. He brought up last year’s hot topic regarding foreign buyers allegedly driving up real estate prices, that is what widely believed to be true although statistics show that fewer than 5% of real estate transactions record foreigners as buyers.
Meanwhile, Johnston and Daniel’s senior vice-president Dianne Usher said that it is time and not government intervention that’s needed to cool down the rocket hot real estate market. She also predicts that sales and prices will continue to hike up and cause a lot of disappointed buyers this spring.
Usher further shares that although the situation is currently unsustainable, she has no reason to believe that the GTA is in a real estate bubble and says that raising certain taxes will not result in the desired outcome.
Solutions May Be Long Coming
The solution for tempering the market would be to increase the available housing but of course, that is going to take a while. Builders will have to develop land, draw up plans, and build, a process that she says will be more beneficial if it is more streamlined. She says that additional taxes will be unfair in their view.
TREB’s Jason Mercer shares that the market needs more than just an increase in listings to balance itself out, especially that the busy spring season is now here. A 1 to 2 years’ timeframe with listings outnumbering sales is what is needed. He further shares that a balanced market last year should have had about 200,000 listings for the 130,000 sales, but the real numbers are closer to 150,000 to 160,000.
Sales Are Still On The Rise
March 2017 saw an 18% sales increase compared to March 2016, a figure of 12,077 compared to 10,260. No wonder the average price for homes is still climbing!
Cooling measures are being considered by the government while OREA (Ontario Real Estate Association) believes that the rising real estate prices are an indication that the liberal government will have to allow building more homes to meet the demand.
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