The Changing Face of the GTA Housing Market

toronto_buyers_market

The headlines across local and national media outlets all agree. “The market has changed.” “One of the country’s hottest real estate markets might be cooling down.” “Toronto home sales drop most since recession.” The GTA housing market is finally cooling.

After years of extraordinary home sales and incredible price jumps in the GTA, we might finally be seeing the market even out. Potential GTA home buyers had got to be relieved when the Toronto Real Estate Board (TREB) reported the GTA housing market’s declining numbers last month. For years, the red-hot housing market has favoured sellers (and new home and condo builders). It’s been a tough go for buyers, who have had to compete with investors and deal with rising prices and limited availability, and has contributed to the GTA market’s vast expansion. Now, with more homes on the market and prices going down, the market is starting to look more balanced.

These changes are being partially attributed to new rules put in place by the Ontario government to cool down the housing market – the Ontario Fair Housing Plan. The new rules include a 15 percent foreign buyers’ tax, rent controls that limit annual increases, and several other measures. Coupled with changes last year from the federal government to tighten up mortgage lending regulations, which restricted the amount of debt Canadians can take on, it’s natural to see demand for homes declining. There are many factors at play.

It’s too early to tell the long-term effects of this recent dip. It has definitely made an impact, and will make it easier for buyer demand to be met. But as Jason Mercer, TREB’s Director of Market Analysis, reports, “the actual, or normalized, effect of the Ontario Fair Housing Plan remains to be seen.”

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