Buying New house in Toronto (price decline trend)

[raheelpk]

Starting this thread for sharing info and experiences to buy new home in Toronto

- Home prices went high till the 15% tax was slapped ( on foreign buyers) by the Ontario Govt. along with several other measures
- Average home price declined to 793000 in two months from 920xxx and record 37% drop in sale transactions, a record low in almost a decade
- Record number of new homes listings making inventory high , to push prices further low
- Wednesday 19 July, Bank of Canada will raise key interest rate, first time after couple of years
- Decline of foreign buyers activity after 15% tax
- Further current and historical statistics can be monitored at http://www.trebhome.com (toronto real estate board), releasing monthly reports containing total transactions with price details for each and every area
- It is expected price will continue to go down for coming months due to high inventory and sluggish activities by both local and foreign buyers and increase in bank interest rates

 

[torontosm]

Starting this thread for sharing info and experiences to buy new home in Toronto

- Home prices went high till the 15% tax was slapped ( on foreign buyers) by the Ontario Govt. along with several other measures
- Average home price declined to 793000 in two months from 920xxx and record 37% drop in sale transactions, a record low in almost a decade
- Record number of new homes listings making inventory high , to push prices further low
- Wednesday 19 July, Bank of Canada will raise key interest rate, first time after couple of years
- Decline of foreign buyers activity after 15% tax
- Further current and historical statistics can be monitored at http://www.trebhome.com (toronto real estate board), releasing monthly reports containing total transactions with price details for each and every area
- It is expected price will continue to go down for coming months due to high inventory and sluggish activities by both local and foreign buyers and increase in bank interest rates

The Toronto housing market was driven by reckless speculation and foreign money. As with all bubbles, this one too has now popped and the tide has clearly turned. Prices will continue to decline as interest rates keep rising and buyers get over the hysteria that drove values to these unsubstantiated and unjustifiable levels. Anyone seeking to buy a house would be well served to wait as prices will only go down from here.

 

[raheelpk]

A Third Of The Money In Toronto's Housing Market Has Disappeared
http://www.huffingtonpost.ca/2017/07/17/canadian-home-sales-drop-by-the-most-in-7-years_a_23033866/

Toronto now officially a buyers’ market, amid nationwide home sales slump: CREA report
http://globalnews.ca/news/3603364/toronto-buyers-market-canada-housing-crea/

Government measures are cooling off the housing market, Morneau says
https://www.thestar.com/business/2017/07/18/government-measures-are-cooling-off-the-housing-market-morneau-says.html

 

[xyris87]

A Third Of The Money In Toronto's Housing Market Has Disappeared
http://www.huffingtonpost.ca/2017/07/17/canadian-home-sales-drop-by-the-most-in-7-years_a_23033866/

Toronto now officially a buyers’ market, amid nationwide home sales slump: CREA report
http://globalnews.ca/news/3603364/toronto-buyers-market-canada-housing-crea/

Government measures are cooling off the housing market, Morneau says
https://www.thestar.com/business/2017/07/18/government-measures-are-cooling-off-the-housing-market-morneau-says.html

This is exactly the kind of news I was waiting for. Awesome! As supply increases, rent is also expected to drop a few notches. Great for immigrants.

 

[raheelpk]

Toronto housing chill extends into mid-July with sales sinking 39.3%

http://www.bnn.ca/toronto-housing-chill-extends-into-mid-july-with-sales-sinking-39-3-1.810388

 

[alok4best]

This is exactly the kind of news I was waiting for. Awesome! As supply increases, rent is also expected to drop a few notches. Great for immigrants.

Not really. Supply is very limited. And rents are soaring at the moment. A decent one bed condo can easily cost north of 2000$ a month in downtown Toronto.

 

[scylla]

Not really. Supply is very limited. And rents are soaring at the moment. A decent one bed condo can easily cost north of 2000$ a month in downtown Toronto.

Yeah - I would agree. It's still a mess. I'm not in the rental market but I know a number who are in my neighbourhood. Rents are still increasing and supply is still very limited right now (at least in the city).

 

[torontosm]

Not really. Supply is very limited. And rents are soaring at the moment. A decent one bed condo can easily cost north of 2000$ a month in downtown Toronto.

Supply is hardly limited. This is a nonsensical statement peddled by realtors to try and coerce clients into buying overpriced houses so they can make their commissions. Look at the massive wave of listings over the last two months. When listings are up as much as they have been, then you know that there is certainly enough supply, but it's just being held by speculators trying to time the market. With interest rates rising steadily, it's only a matter of time before these speculators are squeezed and are forced to sell their houses. That's when the market will truly correct and you will see prices fall substantially more than they already have.

 

[alok4best]

Supply is hardly limited. This is a nonsensical statement peddled by realtors to try and coerce clients into buying overpriced houses so they can make their commissions. Look at the massive wave of listings over the last two months. When listings are up as much as they have been, then you know that there is certainly enough supply, but it's just being held by speculators trying to time the market. With interest rates rising steadily, it's only a matter of time before these speculators are squeezed and are forced to sell their houses. That's when the market will truly correct and you will see prices fall substantially more than they already have.

Lol. If there is abundant supply, then good for buyers/renters. Unfortunately, the going rate does not agree with your argument. People with established credit are finding it hard to get a place for rent. 1 bed condos are going for 2K. Even rundown rental apartments are asking for 1500 or so. In fact, even the basement apartments in suburbs are not cheap anymore. If you manage to find something for cheap, good for you. I am a neutral party here. Just stating how the rental market is at the moment. Just 2 years back, I was able to get a 1 bed plus den condo for 1750 a month plus utilities. I moved out , and the same condo has been leased for 2100 few months back.

 

[deerestlovelybear]

It is exactly the opposite. Houses are listed for sales but at price mostly not affordable to most immigrants. Rents are soaring so much in the past few weeks due to rent control and landlord become selective and picky in chosing tenants, 1 bed room condo in downtown is now more than 2K, As people are not buying due to worrying that price is declining, they are competing for rental properties and condos to live and it has becomes out of whack now, in almost every listing in downtown Toronto, there is bidding war now for rent

 

[torontosm]

Lol. If there is abundant supply, then good for buyers/renters. Unfortunately, the going rate does not agree with your argument. People with established credit are finding it hard to get a place for rent. 1 bed condos are going for 2K. Even rundown rental apartments are asking for 1500 or so. In fact, even the basement apartments in suburbs are not cheap anymore. If you manage to find something for cheap, good for you. I am a neutral party here. Just stating how the rental market is at the moment. Just 2 years back, I was able to get a 1 bed plus den condo for 1750 a month plus utilities. I moved out , and the same condo has been leased for 2100 few months back.

I think you are confusing two topics here. The OP's post was about buying, and that's what I referred to in my post as well. I am not sure what's going on in the rental market as I haven't been following it at all.

 

[scylla]

I think you are confusing two topics here. The OP's post was about buying, and that's what I referred to in my post as well. I am not sure what's going on in the rental market as I haven't been following it at all.

One of the early responders to this topic introduced the topic of rentals. Some of us have responded to that to indicate rentals are high at this time and still rising.

 

[torontosm]

One of the early responders to this topic introduced the topic of rentals. Some of us have responded to that to indicate rentals are high at this time and still rising.

Ok, thanks for the clarification.

If rents are rising at the rates suggested earlier, then that may provide a floor to housing prices. The problem to date has been that yields are so low, virtually every investor is in a negative monthly cash flow situation, and are purely betting that prices will rise in order to generate a return. This is not responsible, and nor is it healthy for any market. If rents rise, and prices decline, we should reach an equilibrium where the decision to buy vs. rent is more difficult than it is today.

 

[raheelpk]

Canada’s cooling experiment

https://www.theglobeandmail.com/real-estate/the-market/canada-housing-reform-impact-foreign-buyers/article35854598/

 

[racer46]

Wouldn't you agree that a new immigrant who is planning to stay at least until he gets citizenship in 4 years, buy a house now before the prices go up and not waste money on rentals? Thoughts?