Government Shows Concern for the Spillover effect of Toronto’s housing prices

Canadian real estate has been under the close watch of both local and foreign buyers with Vancouver and Toronto housing prices the growing concern for many.

Last year, these two metro cities became the most expensive cites in Canada, with home prices of all types of houses reaching high levels.

Although home prices in Vancouver in August 2015 begun to cool down, data shows that in contrast home prices in Toronto with prices escalating.

However, the present concern is that the housing prices in Toronto are also affecting the home prices of other nearby markets.

On Tuesday, the federal housing agency expressed their concern on the rate at which home prices in Toronto are affecting other markets.

During the third quarter of 2016, home prices in Toronto increased by 18% while home prices in some other hot markets are cooling, prices in Toronto are moving in the opposite direction.

Last year, the government had introduced tougher mortgage rules that limit the way consumers borrow money, but this is not working in the city.

According to the Canadian Mortgage and Housing Corporation, homes in Toronto are valued more than they are worth hence it is a contributing factor fueling home prices in the city.

The high prices have broken the important aspect of the economy and demographic necessities.

Data also shows those regions that are closer to the city are feeling the heat of the spillover effect and at a greater risk of having negative price adjustments than Toronto itself.

Reports also show that a sudden 10% drop in home prices in the Greater Toronto Area will bring about a 14% drop in the Hamilton home prices in a year period.