Foreigners not reason for rising housing prices in Toronto area: board
New rules to cool market criticized as April sees ‘strong growth’ in listings
Housing prices in the Greater Toronto Area rose 31.7 per cent in April from a year ago, but local realtors say a surge of new listings are on the way that might meet demand.
The Toronto Real Estate Board also lashed out at new provincial rules to create affordability in the market, including a 15-per-cent tax on non-residents, and said its own new data concludes the share of foreign ownership is still low.
The Toronto Real Estate Board said Wednesday its average price for all housing rose 24.5 per cent from a year ago to $920,791. March average sale prices for all housing were $916,567, up 33.2 per cent from a year ago.
The new data includes 10 days of reaction to 16 new provincial actions to cool the market, including a 15-per-cent tax on non-resident or foreign buyers and tougher new rent control rules.
“The fact that we experienced extremely strong growth in new listings in April means that buyers benefitted from considerably more choice in the marketplace. It is too early to tell whether the increase in new listings was simply due to households reacting to the strong double-digit price growth reported over the past year or if some of the increase was also a reaction to the Ontario Government’s recently announced Fair Housing Plan,” said Larry Cerqua, president of the board, in a statement.
TREB said there were 33.6 per cent more new listings than there were a year ago. New listings were up by double digits for all low-rise home types, including detached and semi-detached houses and townhouses, but condominium apartments were at the same level as last year.
The board also released new data looking at property assessment land registry information to analyze foreign and speculative ownership in the Greater Golden Horseshoe, the area that surrounds and includes Toronto and is home to nine million people. The GGH is subject to the 15-per-cent tax. TREB analyzed data provided by the Municipal Property Assessment Corporation and Teranet Inc. for the GGH between 2008 and April 2017.
The group finds the number of buyers with a mailing address outside of Canada is what it describes as “well-below one per cent” regardless of the year, and most of those buyers had American addresses.
Between 2008 and April 2017, TREB says the average share of foreign buyers in the GGH was 2.3 per cent. The share was 2.2 per cent in 2016 and 2.6 per cent for January through April 2017.
The group also says that 87 per cent to 90-plus per cent of buyers purchased their homes as a place to live. For 2016, that figure was 91.5 per cent, but dropped to 88 per cent from January to April 2017.
TREB noted that a survey of its brokers produced by Ipsos and released earlier this year estimated that 4.9 per cent of transactions between the fall of 2015 and the fall of 2016 were made up of foreign buyers.
On the speculation front, the board looked at purchases between 2008 and April 2017 to analyze the number of homes bought and sold within one year of the original transaction by domestic or foreign buyers. The share was less than five per cent in 2016, and about seven per cent between January and April 2017.
The condo market saw record quarterly sales as inventory plummeted in the first quarter, some of it clearly linked to investors looking to profit from units quickly.