Toronto Home Prices on the Brink of Falling
A leading U.S. ratings agency says, that the huge gains or profits seen in house prices all through the Greater Toronto Area could cease with modifications even in the cards.
The province drew a sixteen point plan, aiming to create affordability in the Greater Golden Horseshoe, which is an area harboring nine million civilians and is included in the Greater Toronto Area located south of the province but it might derail the market, according to Fitch Ratings.
The home prices in Toronto have been up more than 40 per cent in the past three years, which has by far outpaced the support provided by economic fundamentals in that area. A legislation proposed by Ontario should definitely aid slow down price growth by tempering with home prices in the Greater Toronto Area and hopefully result to a remedy in price.
New measures were taken on April 20 by the provincial government to help cool down the market, after average resale prices in the Greater Toronto Area went up by 33 per cent in March last year, reported by the Toronto Real Estate Board. As a result, a newly detached home on average is now valued for about $1.78 million, rising to 70 per cent over the past year.
More so other fundamental measures in the Ontario plan were a non-residential speculation tax of 15 per cent, a 2.5 per cent increase in cap per year rents and lastly a much better means by which municipalities could influence the housing market using property taxes.
If the tax placed on foreign buyers alongside the rent controls and other discussed undertakings were to be passed, then it will contribute immensely to the growth of sales activity and home prices in Ontario compared to Vancouver wherein there was an imminent drop in home prices after three per cent of the tax was lunched. So far as of January 2017, prices increased and are now at their peak.
Statistics from the MPAC property Assessment show that the number of borrowers with more than one residential property in their possession in both Hamilton and the greater Toronto area increased by 30 per cent between 2014 and 2016.