For 30 days since last month’s introduction of the Ontario’s Fair Housing Plan, sales of freehold homes in the Greater Toronto Area dropped by 26 per cent year-over-year, and this is according to information obtained by John Pasalis, the president of Realosophy which is a Toronto based brokerage.
“Of course, it’s cause for a bit of concern. It’s a significant decline, especially given the fact that it’s not proportional across the GTA. Certain areas are getting hit harder than others,” said Pasalis to CREW sister population, MortgageBrokerNews.ca “And that coupled with the big surge in listings … it’s cause for concern because especially in the short term, the concern is sellers who have bought their homes and now have properties in the market … are having a very hard time selling.”
In 10 of 12 researched markets, freehold sales dropped. This was led by Richmond Hill (-62.1%), followed by Stouffville (-49.3%), Markham (-46.2%), Newmarket (-44%), Vaughan (-34.3%), Aurora (-31.2%), Mississauga (-27.4%), and Toronto (-23.3%).
Pasalis argues that it is not the cooling of the market which is the concern, he says it was actually needed, but the rate at which the market appears to be cooling. “You can imagine it’s stressful for sellers who need to sell their house. The worst-case scenario is what if they can’t sell it, or what if they can’t sell it at a price they need to in order to buy their next one? You have to imagine these people, they bought a house assuming they’d sell their current home at a certain price and that price was based on April or March 2017 numbers. And if they’re getting 10% less now because there’s so much inventory and more buyers, even if they sell it they may not be able to afford their next one.”
As for the reasons for the cooling of Toronto’s real estate, it is argued by Pasalis that it’s due to how the public perceives it as opposed to the actual policies at hand, which includes a 15 per cent foreign buyer tax.
He also said, “It certainly may have triggered people to think about the market and get anxious about it, but I don’t think the policies in and of themselves cooled demand.”