After seeing what’s happened with Vancouver’s crash in housing prices, many are wondering if the same chill is headed for Toronto.
The latest numbers show that’s not the case (for now). According to the Toronto Real Estate Board’s resale market figures for March 2019 released on Wednesday, Toronto home prices saw a slight increase during the month, while sales were flat and new listings in the city fell.
According to TREB’s numbers, 7,187 residential sales were reported through TREB’s MLS System in March. When looking at the average price for a home in the Greater Toronto Area, numbers are up slightly, at an annual rate of 0.5% to $788,335. The average selling price for Q1 2019 was also up by 1.1% year-over-year.
When looking at home sales in the first quarter of this year, however, we see a dip of 1% when compared to the first quarter of 2018.
New listings took a deeper dive and were down by 5.1% year-over-year in March. New listings for the first quarter of 2019 were also down by 1.5% It’s no doubt that having fewer homes listed for sale during the month helped boost prices. It’s unclear, however, why listings went down. It’s possible that sellers could be waiting for a stronger market to list their homes.
When isolating the City of Toronto and leaving out the GTA and Rest of GTA categories, new listings are up 4.1% from last year.
TREB, which often advocates for the real estate industry, has blamed the slowdown on government policies.
“The OSFI stress test continues to impact home buyers’ ability to qualify for a mortgage,” said TREB President, Garry Bhaura. “TREB is still arguing that the stress test provisions and mortgage lending guidelines generally, including allowable amortization periods for insured mortgages, should be reviewed. The supply of listings in the GTA also remains a problem. Bringing a greater diversity of ownership and rental housing online, including ‘missing middle’ home types, should be a priority of all levels of government.”
The average price of a home in the City of Toronto in March was $830,043, up from $817,619 during the same month last year, according to TREB.
In its release, TREB also voiced concerns about the recently proposed hike to Toronto’s Municipal Land Transfer Tax (MLTT) on higher-priced properties, calling it “problematic.”
“As the recent City budget process showed, the MLTT is not a sustainable revenue source from which to fund municipal programs,” said TREB’s CEO John Di Michele. “On top of this, additional MLTT on higher priced homes could have a trickle-down effect on the supply of homes throughout the housing price continuum.”
Three city councillors, Joe Cressy, Ana Bailao and Brad Bradford, introduced the concept on March 22, arguing that it could help fund housing subsidies for struggling families. The councillors said that for every $1 million in investment generated from the new tax of 3% on homes with values of $3 million or more (homeowners with homes worth more than $2 million currently pay 2.5%) “could provide hundreds of dollars each month in housing allowances to around 200 households,” according to CBC News.
Land Transfer Tax is an important part of closing costs when buying a home. It’s calculated by taxing a certain percentage of the purchase price of the home. Some cities, like Toronto, also charge a municipal land transfer tax on top of it.
Torontonians were recently hit with higher property taxes. On March 7, Toronto’s city councillors approved a 3.58% hike. City staff used the example of a $665,605 home to illustrate that the tax hike translates to a $104 annual increase, with a total property tax bill of $3,020.