Could the city of Toronto really have overestimated its revenue from its land transfer tax by almost $100 million?

It has been a common government refrain for years now — and from all levels of government, mind you — that something must be done to cool the city’s housing market. The Ontario government has been trying to cool the market by implementing a foreign speculation tax for the Greater Golden Horseshoe region. The Bank of Canada has been trying to cool the market by raising interest rates. The country’s federal financial regulator has been trying to cool the market by tightening up mortgage rules.

Revenues from the land transfer tax are projected to come in $99.2 million short, due primarily to what a city council finance update describes as “lower residential market activity.”

In other words, the market cooled, and Toronto politicians were caught off-guard. Astonished. Startled. Who could have predicted? No one saw that coming. Except maybe everyone who is not a member of Toronto’s City Council.

taken from & read more: https://nationalpost.com/opinion/marni-soupcoff-wow-looks-like-government-intervention-can-backfire-who-knew

Toronto is currently missing out on crucial population targets which are leading to a huge shortage of homes. Between now and 2041 – there could be 7,200 less homes built each year due to these missed targets.

This report indicates that as many as 165,600 homes would not be built, and the loss would be equal to $1.95 billion in GDP from residential construction: http://rccao.com/research/files/RCCAO_LPAT_REPORT_2018.pdf

Areas of concern are that only 15% of GTHA households occupy medium-density housing, causing an inadequate supply of housing variety. Municipalities can better optimize infrastructure by ensuring that community growth planning is based on a long-term and strategic analysis of future housing requirements.

Toronto’s number of annual starts is 5-15% higher than required to hit targets, but lack of land availability means the city’s supply will be geared toward taller buildings. York Region is the area in the GTHA with current annual starts on pace to meet its future target population. In areas with over 80,000 people, Oshawa, Brampton & Newmarket have the lowest share of higher-density starts.

For more info on this subject – visit: http://torontostoreys.com/2018/12/toronto-home-shortage-2041/

2018 – The year when Canada’s housing market hit the brakes… What will happen in 2019?

The Canadian Real Estate Association sees home sales rebounding a little (2.1 per cent) in 2019 with home prices roughly keeping up with inflation (2.7 per cent). In Ontario, prices will likely climb a little faster (3.3 per cent) and in British Columbia, a bit more slowly.

Quebec, New Brunswick, Nova Scotia & Prince Edward Island can also expect modest price gains, while Saskatchewan and Newfoundland Labrador will experience a small dipping. The forecast for Alberta was stable, although that predated the recent oil price plunge.

The big banks expect interest rates to continue to rise between 2.25 per cent & 2.75 per cent by the end of 2019. Todd Schlanger, senior investment strategist at Vanguard Investments Canada says the Canadian economy will likely continue to grow in 2019, albeit at a slower pace than in 2018. 

Rather than a housing collapse, a more likely scenario is one in which home prices stagnate as household incomes slowly catch up. Another factor that might help keep the market stable is that rents are sky-high. This could help sustain the demand from homebuyers. 

Home buyers should be patient, and not count on price gains to make up for negative cash flow. And home sellers should be realistic and not fixate on “old peak prices” as they usually end up having to “chase the market down” watching their asking price gradually fall. If you are keen on selling, you have to be ahead of the market and possibly anticipate future prices declines.

For more on this article, visit:

Will it crash? Here’s what to expect from the Canadian housing market in 2019