Earlier this month, City News stopped by one of our open houses at 12 Wendover Road and interviewed Linda about Toronto’s hot housing market and whether foreign buyers are responsible for the spike in prices.
From what we’re seeing, it is more domestic investors and the lack of supply that are driving up housing prices. An IPSOS survey from the start of this year showed the level of foreign buying activity to be fairly low in Toronto- 5% of Toronto sales in which TREB members represented a buyer involved a foreign purchaser in 2016. This isn’t large cause for concern.
Buyers with enough money for downpayments on multiple properties, and who are making good money off of Toronto’s hot market, are hard to compete with. And on top of that, the supply at the start of this year was only about half what it was at the start of 2016. There were just over 5,000 active Toronto MLS listings in January 2017 compared to 9,966 active listings in January 2016. The number of sales was still up, even with significantly less supply, which clearly leads to price increases. The average Toronto MLS price was up almost 15% from January to February of this year.
It’s basic supply and demand, and until we see more supply to keep up with investors & those moving into the GTA every year, we don’t see a relief to the price increases in the near future. Toronto is a growing city. The best advice we can give buyers is to re-assess their budget and what they want in a property, and see what they are willing to compromise on so that they can get into the market, build some equity, and move up into a better property down the road. It requires being a bit more creative.
It’s a seller’s market right now, so those with money invested in real estate are thrilled, and those trying to get into the market are becoming discouraged. The good news is, once buyers get through the stressful process and become home owners, they will soon see their own investment grow.
“After initially estimating a jump of 10 to 15 per cent in Toronto house prices over 2017, TD Economics now puts that number at 20 to 25 per cent.” (Blog TO)