Homeowners in many communities around Toronto, including Greater Toronto Area have put up their homes for sale in April as they rushed to cash in on increasing prices before the market rises.
The Canadian Real Estate Association said areas of Greater Toronto and Barrie have set records for new listings for any month on a non-seasonal basis. The regions of Peterborough and Kawarthas new listings rise up to 32 per cent in April more than the listings in March, while Kitchener-Waterloo had up to an 18-per-cent increase in new listings.
The listings increased in the same month the Ontario government enforced varieties of steps and measures to reduce the overheated housing market in Greater Golden Horseshoe Area, which covers a major part of Toronto.
One measure announced April 20 is a new 15-per-cent tax on foreign buyers who purchase homes in the Golden Horseshoe area.
It has been widely debated that many home buyers listed their houses before the new measures could reduce house prices, which rose by more than 30 per cent in the GTA in March compared to last year.
Robert Kavcic, an economist of Bank of Montreal said it is still too early to get a full picture of the impact of Ontario’s new housing measures, but it is “quite clear” they have already had a cooling effect, perhaps because sellers sensed a “looming correction” could be coming.
“While that might put peak price growth behind us, the question is how much the market will cool from the unsustainable 30-per-cent-plus pace, and how long the adjustment will persist,” he said in a statement.
“If Vancouver is any guide, the answers appear to be ‘somewhat’ and ‘not too long,’ at least while interest rates are pegged at current levels.”
Gregory Klump, CREA chief economist said both buyers and sellers reacted to the new policy announcement in April, helping rebuild the inventory of houses available for sale after a severe shortage of supply.
“With only 10 days to go between the [April 20] announcement and the end of the month, sales in each of these markets were down from the previous month,” he said. “It suggests these housing markets have started to cool.”