An unprecedented increase in the cost of purchasing a home in Toronto has gone up by 17.4 per cent over the years with the latest revelation of the Teranet-National Bank home price index. This is evidence of the high desirability which the funds in Ontario continues to display. The president of the Toronto Real Estate Board, Larry Cerqua pointed out that consumers should prepare themselves for the price increase, but then again, not because of foreign currency, which continues to play a petty role in Toronto’s market as at now.
The president explained; “If it does increase, it’s usually because of the fact that there’s no supply and yet the demand is there. You can’t make land, you can’t build out, so you’ve got to build up.” The number of consumers going up will start a preferable choice of type of housing over single detached houses, the likes of condominiums and townhouses.
Larry further mentioned in reference to the increasing popularity of co-ownership in the city, saying; “It’s a possibility. People want to get into the market, one way or another, but they are also being creative about it. New buyers are coming in with the perspective of, ‘We want to get into the marketplace, whatever it takes.’ If it means teaming up with a family member, they will go for it.”
To add to that, buyers have been acting out towards the recent change in the federal mortgage rules. This change has now indicated that one needs to be at a particular level of liquidity to be qualified for home ownership.
A senior economist at the Bank of Nova Scotia, Adrienne Warren cautioned that both the tightening of the rules and lowered affordability does is not a good sign for the Toronto market. Warren said; “Given increasingly stretched affordability, we expect the latest tightening in mortgage qualifying rules will lead to a cooling in GTA housing demand over the coming year. At the same time, severely constrained supply – the ratio of sales to new listings climbed to a seven-year high in September – will likely keep upward pressure on prices in the near term.”