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As price increases become less severe and sales of homes throughout the GTA decrease, it seems that the Toronto real estate market is poised to calm down. However, similar to the scenario in many other major cities, whether or not this will have a positive impact on the average buyer in Toronto remains to be seen.
Though Toronto’s housing bubble has not yet burst, sales of houses are slowing down. According to the Toronto Real Estate Board (TREB), home sales in the GTA are down roughly 37% from June 2016. There were 7,974 sales reported through TREB’s MLS system in June 2017 compared to more than 12,000 in June 2016. Prices in the Toronto real estate market, unfortunately, have not experienced a similar decline: in June, the average price across the GTA for all home types (condos, townhomes, houses, etc.) was CAD 793,915—a decrease of roughly 8% from the month before, but an increase of more than 6% from June 2016.
In a press release, Toronto Real Estate Board president Tim Syrianos said, “We are in a period of flux that often follows major government policy announcements pointed at the housing market. On one hand, consumer survey results tell us many households are very interested in purchasing a home in the near future, but some of these would-be buyers seem to be temporarily on the sidelines waiting to see the real impact of the Ontario’s Fair Housing Plan (OFHP).” On the other hand, Syrianos added, “we have existing home owners who are listing their home because they feel price growth may have peaked. The end result has been a better supplied market and a moderating annual pace of price growth.”
Though moderate this price growth may be, it is causing many condo owners have begun to cash out of the market and are choosing to sell rather than rent, resulting in a shortage of rental units for GTA residents. With prices for full-sized homes still relatively high, this is likely to negatively impact Torontonians looking to enter the Toronto real estate market.
It is largely unclear what the future of the Toronto real estate market will look like from here, but one thing is clear: should the market collapse, buyers across the GTA will have to rush and compete to seize housing opportunities while they last, and first-time buyers will likely not fare well in this highly-competitive landscape.
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