Toronto Real Estate 2016 in Review
Home prices rising was the story of 2016 (again). RBC Economics Research released it’s latest Housing Trends and Affordability Report which states that affordability has hit an 8 year low. The new mortgage lending rules did lead to a cooling of Canada’s markets but not in Toronto which shot to the top of the market.
Toronto is facing a housing shortage. Community opposition to new builds is strong. Zoning bylaws make it difficult for builders to build new. This mismatch between supply and demand has been driving up prices. There is a big low in inventory as established buyers and those who want to downsize are reluctant to sell in the face of finding the right new property.
Federal policy of tightening mortgage rules have make it difficult for first-time home buyers. In previous generations, parents rarely helped kids out with down payments on homes. This is no longer the case as students emerge from universities with little hope of being able to purchase on their own. Canadians now have the highest debt burden of people in any G7 country.
Shrinking inventory had made Toronto buyers more aggressive and creative. We saw more and more homes being priced at 30 or 40% above asking price. Many Torontonians are choosing to simply stay put and renovate what they have. Building permits surged around the country in October (except for Quebec) according to Stats Canada with a high occurring in Toronto.
It’s been a crazy year and there is lots to talk about. Give me a call if you’d like to sit down over coffee and discuss any of these 2016 trends or what we think will be happening in 2017.