The Toronto Real Estate Board (TREB) isn’t a fan of a foreign buyer tax in Toronto.
Despite evidence from BMO chief economist Douglas Porter showing that it appears to have been successful in cooling the runaway real estate market in Vancouver, TREB simply believes there aren’t enough foreign buyers in Toronto for it to make an impact.
According to its survey, only 4.9% of GTA real estate transactions involved foreign buyers and many of those buyers bought homes with the intention of living in them (40%), renting them out (25%), or for a family member to live in (15%).
The data contradicts concerns that foreign buyers are scooping up valuable real estate and sitting on the property, putting greater strain on market supply at a time when demand is high.
According to its survey, only 4.9% of GTA real estate transactions involved foreign buyers
TREB warns against potential negative impacts the tax could have attracting immigrants, reducing rental supply, and causing buying activity to spread to surrounding markets, further tightening conditions in the region as a whole.
The board, nevertheless, forecasts another strong year for housing in the GTA, with between 104,500 and 115,500 home sales expected. The baseline forecast is 110,000 sales, slightly below the 113,133 sales reported by GTA REALTORS in 2016.
To make its predictions for 2017, TREB worked with Ipsos to survey consumer buying intentions for the next 12 months. Overall, the number of likely buyers is expected to drop this year, but the home ownership dream is still alive in the GTA, with first-time buyers making up 53% of the likely buyers.
Prices are expected to continue to see double digit percent increases from last year. The average home price will grow by approximately $100,000 in the GTA, to a range from $800,000-$850,000.
Despite the prices, likely buyers intend to offset this challenge by simply saving up larger down payments. The report says that 27.6% of all recent homebuyers planned on making a large down payment. People are also getting creative when it comes to saving the money for their down payments.