Less than 3 months ago the real estate market in the GTA was in a much different state than it is today.  It was common for condos for sale to get 20+ showings within a few days. During this time, our team managed to sell some condos as high as 120% of asking price!

 

On April 20th, this all changed when the government of Ontario passed a new law called the Ontario’s Fair Housing Plan. Under this new legislation, 16 new measures were introduced to help more people find affordable housing, increase housing supply and provide a way for the real estate market to balance out a little more.

 

As a result of the changes, the number of freehold home sales dropped by over 20% in May 2017, as compared to May 2016. Condo sales have only dipped by 6.4%. This might suggest that these new rules had a more meaningful effect on pricier properties, rather than the affordable real estate.

 

Despite the number of sales being down, the prices for most condos have stabilized compared to what they were last year.

 

When talking to some of our buyers we noticed a few of them decided to see “how things play out” before buying their next property. On the other hand, some sellers decided to “cash in” on their real estate holdings which have appreciated nicely over the past few years.  This, in part explains the imbalance in the market which has caused the number of transactions to go down. 

 

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      3 Comments

      • Javed says:

        I don’t think prices are going to come down, in fact they are going to rise just marginaly but in the suburbs prices would see bigger increases. All this would be driven by immigration, 300,000 average per year of new immigrants. Newcomers would need some where to live. I would be a newcomer next year and would be looking to make a 20% down payment on something from $350,000 -$400,000

      • Mohamed says:

        Looking at all financial data since 1975, Canadian real estate market has been going up and down as normal performance of real estate market over the year. IN 2006 Canadian market missed UP the real estate correction trend and kept on going high till today as a result of lower interest rate, increase demand due to instability of some countries and absence of taxes over new foreign investors and above all decent debit to income rate plus banks were encouraged to extend mortgage finance. Then market become very attractive for end users and foreign investors. Leverage has become strong strategy to generate massive return. You could inject 15% into new house with banks financing the rest and then in 6 months period return is massive on injected fund. That encourages many investors to buy houses for speculation with few end users as well. As of today, interest rate is increasing which make the cost of mortgage high, 15% taxes was imposed on foreign investment, getting mortgage approve is not an easy job as banks stated to feel the risk, debit to income rate has gone over the roof with families are expected to default to serve their interest and installments, attractive real estate market attracted contractors to build more houses and many people bought off plan projects for resale prior to completion. So what do you think????? Real estate market has slowed down and people till today do not understand the consequence of all financial indicators. Market has not been corrected since late nineteenth, the correct will be bigger than people would expect. My expectation is another 20-30% correction before market would start to stabilize. I have many other reasons but that enough for today

      • Raj says:

        The prices are bound to decrease substantially over next 2 years. I feel pity on buyers who purchased unrealistically and crazy way over 10-100% of asking price. No soft corner for those, who seemed to be investors themselves to drive up the market artificially.
        The bidding war in GTA and Vancouver was as if the land in Canada and for that sake earth has vanished and only these places have been left over to purchase land for home. This was very very irrational.

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