Hold on to Your Hats
The cooling measures introduced by both the Federal and Provincial Governments have taken their toll on the Toronto Real Estate market.
The average sale price for a home hit its peak in April 2017 with an average price of $919,589. This was the highest average sale price ever recorded for the Greater Toronto Area (Source: Toronto Real Estate Board).
But it was all downhill from there.
On April 20th, the Provincial Government of Ontario introduced its Fair Housing Plan. This 16-point plan held some hard-hitting measures including a 15% Non-resident tax, a vacant home tax and broader rent control guidelines for private units.
"A total plummet of almost 20%"
The effects were immediate. The following month saw prices drop sharply by 6% with average sales across the GTA recorded at $864,191. June fell another whopping 8.13% to $793,915. That's a drop of over 14% in just two months (Source: Toronto Real Estate Board).
If that wasn't enough, on July 17th, the Bank of Canada doubled-down with an interest rate hike of 0.75%. The full effects of this announcement will not be seen until figures are released for August but preliminary stats gathered for July are showing another significant drop in price around the 5.5% mark (Source: Toronto Real Estate Board).
"...there is nearly a four-in-five chance of a[nother] hike by October"
Add that all up and the average sold price of a home in the GTA went from its highest-ever recorded $919,589 to an estimated price of just over $750,000 for end of July. A total plummet of almost 20% in just 3 short months (Source: Toronto Real Estate Board).
Tighten That Seatbelt
The future only shows more of the same.
A recent article by the Financial Post writes that "...there is nearly a four-in-five chance of a hike by October". This is predicted after the GDP of Canada reportedly grew over 200% more than was originally estimated giving more room for the Bank of Canada to raise rates.
As sanity abruptly returns to the market, The Dynasty Group wants to hear how this year's changes has affected your Real Estate positions.