A lack of homes for sale should be able to drive Toronto’s sizzling housing market to another time of double-digit price increases, the city’s Toronto real estate board told Tuesday.
The Toronto Real Estate Board said the average price for all types of housing is forecast to rise to about $825,000 — up from $730,472 in December, 2016 and $729,922 for the 2016 calendar year.
The largest year-over-year price increases will be for low-rise types of housing such as detached and semi-detached homes and townhouses, said the board, which represents about 46,000 real estate agents and salespersons.
“While changes to federal mortgage lending guiding principles and higher borrowing costs may impact some would-be homebuyers, the large deterrent is likely to be the lack of inventory,” Jason Mercer, the board’s director of market analysis, said in a statement.
The number of listings at the end of December, 2016 were at their lowest since before 2000, Mercer said.
“It is unlikely that the scarcity of listings will improve to any great degree over the course of the next year in 2017,” he told. “This will set a ceiling on sales proliferation.”
The board (TREB) estimations there will be between 104,500 and 115,500 home sales this year through its MLS system in 2017 — more or less similar to the 113,133 recorded last year in 2016.
TREB is repeating its call for the private, public and not-for-profit sectors to search solutions to increase the number of properties for sale in the Toronto region rather than attempt to reduce demand from would-be buyers.
It told a foreign buyer’s tax, which some called for to rein in Toronto house prices (Ontario Government has already installed 15% such tax for Greater Toronto Areas) after such a tax was implemented in Vancouver, would be misguided. TREB pointed to a survey it conducted among its members in late 2016 that showed 4.9 per cent of transactions in the Greater Toronto Area involved foreigners.
After a foreign buyer’s tax for buying property in Vancouver was introduced in August, 2016, the city experienced a whopping drop in the number of homes sold — in some cases, monthly sales fell between 30 to nearly 40 per cent on a year-over-year basis.