Homes and Condo Mississauga

Tumbling Toronto home sales signal a return to normal market, say analysts


"There was a bubble in the housing market, speculative shopping boomed, especially in the York region, and York Region is the hardest hit," he said.

The sale of real estate that now seems so disastrous compared to 2017 and 2016, is actually just back to normal.

"It is simply the market that returns to where it should have been if all this speculation had not happened," said Pasalis, who thinks that sales will end up somewhere at the 2015 level.

The provincial policy and the mortgage stress test ensure that buyers sit back and breathe, said David Amborski, president of the Center for Urban Research of Ryerson Land Development. But he expects the sale to return to a normally busy spring level.

"It does not go back to the old tree, but it is going to normalize – leveling," he said.

Wringing hands over real estate is generally "not looking back", and it is almost certainly temporary, "said Peter Norman, chief economist at Altus Group, the research firm that follows sales of new homes.

economic fundamentals, including "incredible job growth last year", along with the huge influx of residents to the GTA – plus growth in family income "since the recession & # 39; of 2008-09 has been a sort of turnout – means that the market in Toronto will rise, he said.

"Job growth is pushing children out of their parents' cellars and it encourages existing tenants to go home and encourages existing owners to move higher, which is the most important part and often with a little delay," said Norman, which expects interest rates to stabilize this year and that prices will rise by 5 percent by the end of 2018.

"In times we have had a terrible real estate market in the city – 1991 to 1995 for example; briefly summarized in 2009 – it has always been related to external economic shocks.It is the economic factors that really stimulate the market, being not the financial conditions, and the financial conditions only make people re-align how and where they buy, "he said.

The current sales decline could ultimately improve affordability, if falling sales were moderate prices, said Sheila Block, senior economist at the Canadian policy alternatives center.

"If you think we're in a speculative bubble, those bubbles are never slippery," she said.

So far, none of the housing or the financial policy has done anything to improve affordability. But if governments – federal, provincial and municipal – use a more coordinated approach to tackling affordable housing needs, this could ultimately increase the line to middle-income supply, she said.

In view of the affordability of the region, it is possible that more households with a medium income have to reconsider their housing property, since the costs here are relatively high. "Affordable and stable rental offers can be something that ordinary people of the middle class have to look at," she said.

Even price drops such as the 4.4 percent year-on-year decline reported by the Toronto Real Estate Board in January, are the result of statistics skewed by Toronto's "out of whack" Toronto region last year, Dana Senagama said. an analyst at Canada Mortgage and Housing Corporation (CMHC).

"Yes, prices have started to slow down but it comes from an untenable peak," she said.

The current cooling has not solved the overvaluation problem that CMHC has highlighted in the Toronto region. "The fundamental shortcomings are still there," said Senagama, who admits that it is not clear that the fundamental supply and demand issue is solvable, because a prosperous region continues to attract immigrants and employees.

Density – more people in less packaging space – is an answer to affordability, but even there, the high-density high-rise housing supply, which consists mainly of condos, is getting tighter, causing prices to rise, she noted.

"One way to counter that is to have more rental offerings," Senagama said. But although there are signs of renewal on the specially built rental side, there is a trend towards luxury rental. And even then the level of supply does not approach that of new condos.

Moving to more mid-rise and wood-frame construction can help lower the price of building rent, she said.

In some ways, the problem of housing stock is a by-product of the success of the Toronto region, Senagama said.

"This is something that is not unique to us," she said, referring to cities such as New York, London and Tokyo.

"We know what this pressure creates – every city that receives many people and grows, these are problems."

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