Toronto housing prices on the up amid tightening supply

Demand continues to outpace a dwindling supply of listings

TORONTO’S home prices extended gains in November, and are now accelerating at the fastest annual pace since 2017 as demand continues to outpace a dwindling supply of listings.

Benchmark prices on homes sold in Canada’s biggest city rose 0.6 per cent in November from October, bringing the increase from a year earlier to 6.8 per cent, the Toronto Real Estate Board (TREB) said in a report on Wednesday.

The number of transactions also rose, with sales up 14 per cent from November 2018.
Toronto’s housing market began bouncing back in recent months – driven by a combination of lower mortgage rates and rising population – after almost two years of adjustment to higher taxes and tighter regulations to tame soaring valuations.

While transactions still remain well below records in 2016, when the market was being driven by speculative demand, prices have fully recouped their declines and realtors are cautioning that values could continue rising, given the dearth of listings and supply.

Active listings fell 27 per cent in November from a year earlier, said TREB.

Jason Mercer, the board’s chief market analyst, said in the statement: “Increased competition between buyers has resulted in an acceleration in price growth.

“We expect the rate of price growth to increase further if we see no relief on the listings-supply front.”

Condos have been recording the biggest increases over the past year, with benchmark prices for such homes up 9.5 per cent from a year ago, versus 5.1 per cent gains for single-family detached residences.

The average price of a detached home sold in Toronto last month was C$1.04 million (S$1.07 million), versus C$617,658 for condominiums.

The average price of a home in Toronto and its suburbs rose 7.1 per cent from a year earlier to C$843,637 in November.

That’s still below the peak of nearly C$921,000 set in April 2017, as activity over the past couple of years has shifted to the less-pricey condo segment of the market. BLOOMBERG
Find out the value of your home at www.SuttonHomeValues.com

Check out the Latest Inventory at https://www.itorontocondos.ca/property_find_form_common

Buying A Home Just Got Easier! New Mortgage Incentive Coming This Year

The Canadian government is taking steps to make homebuying easier for Millennials. According to the budget proposal of 2019, the government intends to put forth $1.25 billion over a three year span from the CMHC First-Time Home Buyer Incentive.

Borrowers would still have to figure out a down payment of at least 5% of the purchase price, but they would still receive an incentive of up to 10%, which would lower the mortgage.

The incentive covers 10% for newly built homes and 5% for existing homes. A few of the catches: Your annual income must be under $120,000 to participate, and you will have to eventually repay the incentive although officials have not decided how that will unfold just yet.

The federal stress test will still be required to ensure buyers will be able to repay the debts at even higher rates.

The government is also enhancing the Home Buyer’s Plan which allows first time buyers to take out up to $25k from their RRSP to finance a home, without paying tax on withdrawal, they are proposing to raise the cap to $35k, and the new limit would apply to withdrawals made after March 19th 2019.

The only problem is that more borrowing means that housing prices are likely to go up, and may encourage Canadians to take on more debt. Buyers must keep in mind that the government is not extending the program’s repayment timeline, so any money taken out of their RRSP must be put back with 15 years to avoid the withdrawal being added to their taxable income. Now Canadians will have to repay a max. of $35k instead of $25k over the same period.

Are you a first-time home buyer looking for the best guidance in the business? Call us today! We have agents standing by to help you with any questions of concerns you may have.

Sutton Group Realty Systems Inc., Brokerage

416-896-333 / 905-896-3333

www.SuttonRealty.com  

 

Can You Guess How Low These Mansion Rentals Are In Vancouver?!

Suddenly there are hundreds of multi-million dollar mansions on the rental market in Vancouver for insanely low prices!

“The first day we moved in, me and my family were like, ‘What? Is this real?'” said a UBC Student who moved from Toronto into a 6,000 sq.ft home in West Vancouver.

It could be a combination for the city’s empty home tax or the province’s speculation tax that are dropping the rental rates for these mega-homes.

Some numbers for thought… One $4.64 million home with 5 bedrooms is being offered at $5,900 per month, and another $7.23 million dollar mansion with eight bedrooms for $7,000 per month! With these astonishingly low prices, the City of Vancouver may have the cheapest real estate in Canada right now.

However, these low rental prices definitely put landowners in a difficult position when you think about the tax rate on such a large home. Taxes can add up to 1% of the home’s assessed value, and if the landlord declares less than 50% of their combined household income for the year, the minimum tax rate will be 2%.

One of the reasons landlords are renting at low rates is not to make a profit, but rather to hang onto the property until they are ready to retire and move back to Vancouver. If they don’t rent it out, they’ll need to pay hundreds of thousands a year. If you rent out a building, it saves hundreds of thousands per year, even if the renter does not may any rent.

Many of the renters for these properties feel fortunate to have such an affordable and large home. A lot of them are being asked “How much are you paying?” and “Are you rich?!”… One can only hope that Toronto will see such rental prices for fabulous properties in the near future.

Are you looking for a great rental property in the GTA area? We have thousands of condos, houses and townhomes for lease right now! 

Give us a call any time, we have real estate agents standing by waiting to help answer your questions and find you a perfect rental!

Sutton Group Realty Systems Inc., Brokerage

416-896-3333 / 905-896-3333

www.SuttonRealty.com