After a record breaking 1st quarter it seems that the GTA housing market is starting to cool. There has been a noticeable decline in selling prices (roughly 20%), but despite this decline, prices are still 15% higher than they were this time last year.
The question on everyone’s minds these days is: What caused this decline? Most Realtors® suggest the cool-down is due to the 15% Foreign Investors/Speculator Tax, on top of numerous other measures taken by the government to cool down the market. Every major news outlet has been highlighting these changes and speculating the impact – Reporting on most people’s largest asset and its worth historically always makes front page news – But what exactly does it all mean?
We agree with the masses that these changes have impacted our market. For those who are unaware, Ontario Premier, Kathleen Wynne announced back in April an effective-immediately 15% tax on any residential property purchase made by anyone who is not a Canadian citizen or permanent resident, as well as foreign corporations.
Experts are claiming that right now it is too soon to tell whether or not the cool-off is a direct cause of the 15% investor/speculator tax, but we believe it is a factor. We feel that the tax itself is not the direct cause of the slow-down and that one of the major causes is the uncertainty of the outcomes the tax will bring to homeowners here in the GTA.
Many sellers still have hope that they can sell their home for what they easily could have months ago- so many in fact that there have been a whopping thirteen thousand listings added since February. You read that right. According to the Toronto Real Estate Board’s Market Watch for May 2017, there are now 19,000 listings on the market compared to February’s 6,000 listings.
Buyers are now sitting back and waiting. Waiting to see what happens to the market, waiting to see if prices will drop like they’ve been anticipating for months. We are on the verge of a buyer’s market after experiencing a seller’s market for so long.
We have noticed less multiple offer presentations, less bidding wars and more price adjustments. Just a few months ago offer dates and bidding wars were the norm, today they are few and far between, but that doesn’t make sellers any less hopeful.
For the first time in a few years, we are entering a buyers market -It may just be the perfect time to seriously think about that investment property you wanted to buy! It will be interesting to see what happens in the upcoming months – Like you, we will be watching!