- Just look at these Toronto prices
- Home costs forecast to dip, then rebound
- Markets at a glance
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Look at these prices
Yes, Toronto home prices may be easing in the wake of Ontario’s new measures.
But consider the inflated levels at which they still stand, and what it would take to bring them truly back to Earth. If they can actually come back to Earth.
“Benchmark prices still look like they were up somewhat in May, but what appears to be happening is a lot of supply at the high end of the market, and the first sign of some price correction there,” said Bank of Montreal senior economist Robert Kavcic.
“But in the low-to-middle range of the market (condos, semis, towns, presumably larger inventory outside the core), the market is still very tight and prices continued to rise in May,” he added after the Toronto Real Estate Board released its sales and price report for last month.
“Similar to Vancouver’s episode, we will likely see most of the impact at the higher end, and May is a good preview of that.”
As The Globe and Mail’s Janet McFarland reports, the market is cooling after the Ontario measures, which included a tax on foreign speculators and an expansion of rent control. That happened in Vancouver, too, after the B.C. government’s levy on foreign buyers of Vancouver-area homes, but that market is now making fresh gains.
The Toronto board’s report showed prices easing on a monthly basis, from April to May, with listings surging. Prices are still sharply higher than a year earlier, though.
Home prices in and around Toronto have become a focus of concern, with observers warning of trouble if prices aren’t held in check and consumer debt levels don’t ease.
And it’s no wonder. Here’s the Toronto board’s look at where things stood in May, with benchmark prices and the annual per cent gains of detached homes in and around Canada’s biggest city, along with the cost of a semi.
And here’s a similar look at the city itself, with the legend below.
“Looking ahead, Vancouver took about six to eight months to adjust to the changes and rebalance the market,” Mr. Kavcic said.
“I suspect we’ll see the modest correction at the high end of the Toronto market continue for a few months before stabilizing and ultimately moving higher again, at least while the Bank of Canada sits on the sidelines.”
Adrienne Warren of Bank of Nova Scotia agreed.
“Recent developments in Vancouver’s housing market following the implementation of a foreign-buyers tax in August, 2016, suggest the softening in Toronto home sales could prove short-lived,” Ms. Warren said.
“Vancouver home sales posted solid gains in the four months to May, and are trending back above their 10-year average,” she added.
“Meanwhile, benchmark prices, after a modest 4-per-cent decline from August, 2016, through January, 2017, have since rebounded 8 per cent to a new record high.”
Markets at a glance
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