Toronto Real Estate Home Prices Report- September 2016

Toronto Real Estate Home Prices Report For September 2016

[All statistics via TREB Market Watch]

In the third quarter of the year just before the holiday season, it will be interesting to see the perfomance on how the Toronto real estate market ends the year. Home ownership figures in September remains very strong. However, with the recent change in Mortgage Lending Guidelines and Capital Gains Exemptions, this will affect some buyers in moving forward with a purchase.

The MLS Sales year over year comparison is up 21.5% compared to 2015. All major home types across the region experienced strong annual rate of sales growth. In terms of year-to-year price growth, lack of inventory continues to push prices up. The average selling price is up by 20.4% based on the MLS Home Price Index. The HPI provides the price growth measure for benchmark home. The average selling price can be influenced by changes in market conditions and the mix of homes sold. We will now have to consider the changes in Mortgage Lending Guidelines and Capital Gains Exemptions which can impact demand or have a temporary effect in GTA home sales. Regardless the changes in these federal guidelines does not fix the lack of inventory constraining the supply for home buyers.

Canadian Real Estate Sentiment Survey Is Positive

You might be getting tired of hearing the Toronto real estate market setting new records every month. This really depends on which side of the fence you are on. The Canadian Real Estate Sentiment Survey outlook is positive. Take a look at the detailed report for Q3.

Mortgage Qualification Policy Change While John Tory is currently in discussion with different levels of the government at the provincial and federal level to determine if Toronto should follow Vancouver's lead to tax foreign real estate investment, Finance Minister Bill Morneau just announced effectiveOctober 17th, Buyers who are putting less than 20% down for CMHC insured mortgages qualified under the best rate for a 5-yr fixed term will also have to undergo a "stress test", where the individual will also have to qualify for the Bank of Canada benchmark rate to finance the purchase [currently the BoC rate is at 4.64%, and the best 5-yr fixed rate is as low as 2.39%]. This may be a prudent measure to control the overheated market, but it will also impact marginal borrowers who are trying to get into home buying reducing the maximum purchase price significantly. If overall rates don't go up, it will be tougher to get a mortgage with smaller downpayment.

Let me help you find a creative solution for your next home in this challenging real estate market. If you would like a more comprehensive real estate report based on your neighbourhood or building, please don't hesitate to get in touch to obtain a customized report through me.

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