Buy­ers on side­lines, but for how long?

Real es­tate mar­ket watch­ers are keen to fig­ure out what might hap­pen in the year ahead

Midtown Post - - News - By Jef­frey Sand­ford

The mighty Toronto real es­tate boom of the past decade seems to be chang­ing as gov­ern­ment mea­sures de­signed to cool the mar­ket that was log­ging an­nual price in­creases of more than 30 per cent be­gin to take ef­fect.

“So far the ev­i­dence is in the very short-term, but it does seem the ac­tions on the part of gov­ern­ment, along with the his­tory of gov­ern­ment — the in­tro­duc­tion of the foreign tax — changed the psy­chol­ogy a bit,” said Sherry Cooper, chief econ­o­mist with Do­min­ion Lend­ing Cen­tres.

“We’ve seen a huge new surge of list­ings. And we’ve seen it con­tinue, ac­cord­ing to the TREB [Toronto Real Es­tate Board], in the first two weeks of May and buy­ers have moved to the side­lines a bit.”

Are the tight bid­ding wars of only three months ago fad­ing into his­tory?

Let’s just say the jury is still out on that one.

“It’s just weird,” said Lau­rin Jef­frey, a Toronto re­al­tor.

“As soon as that rent con­trol an­nounce­ment landed, it seemed a lot of buy­ers wanted to pull out. They’re say­ing, ‘ We’ll wait and see what hap­pens.’ ”

That said, the flood of list­ings is not ex­actly as over­whelm­ing as it ap­peared to be given some re­cent sky-is-fall­ing me­dia re­ports.

“The mar­ket is still out of whack in terms of sup­ply. Much has been made of a flood of list­ings. But part of what’s hap­pen­ing here is that there is some bad ac­count­ing,” said Jef­frey.

“What’s hap­pen­ing is that a lot of peo­ple have pulled their list­ing and then re­sub­mit­ted.”

Jef­frey also noted that the num­ber of list­ings has only spiked in some neigh­bour­hoods. The slow­down seems to be most in­tense in neigh­bour­hoods pop­u­lar with buy­ers from main­land China.

A bit of slow­down could ac­tu­ally be a good thing, said Cooper.

“I was ex­pect­ing it. The dif­fer­ent lev­els of gov­ern­ment were all tak­ing ac­tion at the same time,” she said.

“The de­vel­op­ments could be a good thing from a macro eco­nomic stand­point. Take the ex­am­ple of Van­cou­ver. There the mar­ket slowed, and now they have had just an 11 per cent price ap­pre­ci­a­tion. This is not a hous­ing col­lapse. This ap­pears to be the soft land­ing that we’ve been look­ing for.”

“If you can find a prop­erty that works for you at price you can stom­ach, then do it,” said Jef­frey.

“But there is go­ing to be some weird­ness this year. We’re go­ing to see three or four months of chaotic prices.”

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