FALL REAL ES­TATE ROUNDTABLE

Our panel of ex­perts share their pre­dic­tions and in­sights as we head into the fall mar­ket and touch upon ev­ery­thing from the re­turn of bid­ding wars to the growth of rent strikes

North York Post - - Contents -

Why ex­perts Danielle Bryk and Brad Lamb are bullish on the fall hous­ing mar­ket

BRAD LAMB: Prices have risen fast, and there is cur­rently some price re­sis­tance. In the cur­rent eco­nomic en­vi­ron­ment, I fore­see these in­creases be­ing more eas­ily ab­sorbed. In strong economies, it’s hard not to see prices ris­ing.

TIM HU­DAK: Any time you see more and more peo­ple chas­ing fewer and fewer homes, the cost of home own­er­ship is go­ing to in-

crease. Sure, you may have short-term fluc­tu­a­tions, but you just can­not ar­gue with the ba­sic eco­nomics over the medium and long term. We have more peo­ple com­ing to the Greater Toronto and Hamil­ton Area (GTHA) hous­ing mar­ket as a re­sult of mil­len­ni­als get­ting pro­moted and start­ing fam­i­lies; a stronger econ­omy rel­a­tive to the rest of Canada; en­hanced im­mi­gra­tion; his­tor­i­cally rel­a­tively low mort­gage rates; and a wealthy boomer gen­er­a­tion help­ing their kids get into the mar­ket, via the Bank of Mom and Dad.

JAN­ICE REN­NIE: The real es­tate mar­ket con­tin­ues to ex­pe­ri­ence de­mand pres­sure un­der $2,000,000, with not enough sup­ply and mul­ti­ple of­fers. The dif­fer­ence I am see­ing now is that buy­ers are put­ting more rea­son­able ceil­ings on their pur­chases as to how much over the ask­ing they will pay (note, still go­ing over the ask­ing, though), and sellers seem to be the side with un­rea­son­able ex­pec­ta­tions. The re­sult is ei­ther sales at more rea­son­able prices or sellers tak­ing the prop­erty off the mar­ket, relist­ing at higher price and then not selling.

BARRY CO­HEN: While I be­lieve that TREB sta­tis­tics re­leased for the re­main­der of the year will show marked im­prove­ment over 2017, cer­tain seg­ments of the mar­ket will per­form bet­ter than oth­ers. We are see­ing good de­mand for af­ford­ably priced sin­gle de­tached homes close to the city core, but neigh­bour­hoods fur­ther afield and in the 905 area code are still strug­gling. The av­er­age price of a de­tached home in the GTA is down about 11 per cent over­all.

Up­scale homes over the $2 mil­lion price point re­main well off last year’s pace. How­ever, July was some­what of a turn­ing point, with sales post­ing a year-over-year in­crease of 21 per cent. As sta­bil­ity re­turns to the mar­ket, home buy­ing ac­tiv­ity at this price point and higher is ex­pected to climb. The stress test for mort­gages that was im­ple­mented this past Jan­uary damp­ened the mar­ket. How much of an im­pact has it had, and is it time to re­visit? LAMB: The stress test is bad for young peo­ple and pun­ishes them un­fairly. This is a ter­ri­ble re­quire­ment that must be re­versed. In light of the higher rate en­vi­ron­ment, this test is be­com­ing re­dun­dant.

HU­DAK: Eight months later, it’s clear the stress test is a case study in gov­ern­ment reg­u­la­tory overkill. We all want to in­cen­tivize re­spon­si­ble and sus­tain­able bor­row­ing, but govern­ments should take a more thought­ful ap­proach. Es­ti­mates sug­gest that the stress test pre­vented 50,000 to 100,000 peo­ple from across Canada from buy­ing a home. Think for a mo­ment who those peo­ple are: young fam­i­lies, new Cana­di­ans and en­trepreneurs. The rate of home own­er­ship is ac­tu­ally in de­cline, down from 69 per cent in 2011 de­spite record low in­ter­est rates.

When did the pub­lic de­cide that we wanted to make homes harder to buy for the as­pir­ing mid­dle class?

All lev­els of gov­ern­ment need to pump the brakes on reg­u­la­tory in­ter­ven­tions and start look­ing out for the mid­dle class and the hard-work­ing peo­ple who want to join it. The stress test is too ar­bi­trary, too harsh and needs to be re­placed with a more bal­anced ap­proach. What are the two big­gest im­pacts Doug Ford and the new On­tario provin­cial lead­er­ship could and should have on the Toronto and area real es­tate mar­ket? LAMB: Re­verse the mad­ness ini­ti­ated by the pre­vi­ous ad­min­is­tra­tion.

CO­HEN: New provin­cial lead­er­ship cer­tainly has a dif­fer­ent take on busi­ness, and real es­tate is ex­pected to ben­e­fit from the change. Doug Ford’s pre-elec­tion plat­form in­cluded re­vis­it­ing the le­git­i­macy of the for­eign tax, which has sparked an up­swing in buy­ers re­turn­ing to the mar­ket. How­ever, given past per­for­mance of gov­ern­ment over­all, it’s un-

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