First-time buyers led Toronto to record
TORONTO • The Toronto Real Estate Board doesn’t expect a tightening of federal mortgage rules will put much of a dent in sales figures for the country’s largest housing market.
TREB thinks the Greater Toronto Area could set another record for sales in 2016 or come close to the all-time high of 101,299 transactions last year.
At a conference Monday to unveil its outlook for the coming year, Toronto realtors pointed to an Ipsos Reid survey that shows first- time buyers are expected to be a strong force in coming years.
“In the GTA, there is not an affordability issue,” said Sean Simpson of Ipsos, referring to his company’s findings that 53 per cent of buyers in the Greater Toronto Area in 2015 were first- time buyers. More of the same is expected in 2016 with a majority of first-time buyers between the ages of 18 and 34.
In November, Ipsos surveyed 2,500 homeowners, 1,000 of whom had purchased in the past year, a sample considered accurate to with 2.2 and 3.5 percentage points respectively.
“If there was an affordability issue, it would prevent people from buying,” Simpson said.
Toronto realtors say recent changes by the federal government to increase the minimum down payment from five to 10 per cent for all amounts over $ 500,000 will have little impact on the market. The Ipsos Reid study found that, in 2015, a very small percentage of buyers had planned down payments between five per cent and 9.9 per cent, meaning the federal changes would have little effect on the majority of homebuyers.
“This suggests that only a small percentage of intending buyers will be impacted by the mortgage lending guidelines c hanges announced by the federal government,” said Jason Mercer, director of market analysis for TREB.
He said economic con- ditions in the GTA are still strong, which helped Toronto sales figures last year climb 9.2 per cent from 2014 and eight per cent over the record pace set in 2007.
TREB is predicting between 96,500 to 105,000 sales in 2016, but says the key will be interest rates and whether there is a strong supply of listings — something restricted in 2015 as part of the longterm impact of provincial policy, which had restricted single-family homes.
“Home builders can only build what governments permit and markets respond to policy,” said George Carras, founder of RealNet Inc.
The board expects the average price across the GTA will be between $655,000 to $665,000.
Those prices could be impacted by foreign buyers, which a speaker at the board’s conference said could be on the rise based on volatile markets in China.
“I suggest, given the uncertain markets, more and more ( investors) will look to Toronto and Vancouver ( housing),” said Benjamin Tal, deputy chief economist with CIBC World Markets.
ONLY A SMALL PERCENTAGE OF INTENDING BUYERS WILL BE IMPACTED.