In toronto real estate, Toronto continues to maintain its housing market momentum whiles Vancouver real estate market looks to be softening.
In a report published Tuesday, TD Bank said Vancouver has started what is expected to be a modest correction, which will be reinforced by the recent implementation of the land transfer tax on non-residents.
“Home prices are projected to decline by about 10 per cent in the region by mid-2017, before stabilizing later in the year,” TD said.
However, even with a drop of that size, the TD bank noted that Vancouver prices will still be well above were they were just one to two years ago.
A 15 per cent property transfer tax on foreign buyers came into force this month in Metro Vancouver. The B.C. government brought in the tax in hopes of helping to improve home affordability.
In contrast, the TD report predicted Toronto will continue to show strength.
“Toronto has more room to accelerate over the near term. Barring the levying of a similar tax, foreign investors could switch focus to the more affordable Toronto market,” TD said.
Nationally, the bank said it continues “to bet on a sustained soft landing in both markets — and in Canada by extension — over the next two to three years.”
“To the extent that bond yields fail to track higher, policy-makers may need to consider other alternatives to rein in the Canadian housing market,” the report said.
In toronto mortgage, the report by TD came as Royal Bank said the first half of this year marked the biggest six-month drop in housing affordability in the Vancouver area since at least the early 1990s.
RBC reported its cost-of-ownership measure for Vancouver rose to 90.3 per cent of the median family pre-tax income, after rising 6.1 percentage points in the second quarter and 6.6 percentage points in the first quarter.
The bank said it was the biggest back-to-back deterioration in affordability for the Vancouver area in 26 years of record-keeping.
RBC tracks how much of a typical family’s pre-tax income would be required to cover monthly mortgage interest and principal payments, property taxes and utilities for two categories of housing in 14 urban markets across Canada.
Vancouver’s overall numbers were skewed by rising costs for single-family detached houses while the cost of condos increased modestly over the second quarter compared to the first quarter.
For toronto home buyer, the Toronto area had the country’s second-biggest deterioration in housing affordability during the quarter, with its index of home-ownership costs rising by 2.1 percentage points to 60.2 per cent of median pre-tax income.
RBC said most other major cities saw only a modest decline in housing affordability during the second quarter, while the cities of Calgary, Saint John, N.B., and St. John’s, N.L., bucked the trend with a reduced cost of ownership.
Overall, the Canadian cost of ownership was equal to 42.8 per cent of median family pre-tax income in the second quarter, up 1.2 percentage points since the prior quarter and 2.9 percentage points since the second quarter of 2015.
Read the full post in Financial Post
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