This article is written for https://realtyfocuz.com/(Real Estate Focuses Web Development Company) and shared by Restobox
Collapse in Toronto home prices continues
Analysts have said that the price of real estate properties in Toronto has plunged by more than 17% in the last two months. The prices were at their peak in April after which there has been a steady decline. This fluctuation has led to major shift as well as unpredictability in the buying pattern. The consumers are finding it difficult to understand the market trend due to which there is either a delay or a complete diversion from the investment plans in Toronto.
The starting weeks of the month of July saw a continuous fall in the existing home prices. This was seen in all of Toronto and more specifically in the region of Greater Toronto. This is as per the reports obtained from the mid month data analysis from the TREB (Toronto Real Estate Board). The continued fall in prices may, however, pressurize the authorities to take some legislative steps so as not to lose the potential buyers. It is expected that this development may lead to more lenient mortgage laws in Ottawa.
RealtyFocuz has been keeping a keen eye on the selling price in Toronto and the steps were taken by the Toronto Real Estate Board. The TREB recently sent out a notice to all its members concerning the standard selling price decline in the area. In the notice, it was mentioned that the selling price during the initial weeks of July was $760,356. This was a 4.4% decrease that followed just after the month of June.
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In April, the standard selling price in Toronto was $920,791. So far, this has been the peak market rate in 2017. Following this, there were some measures taken by Ontario, which ultimately led to the cooling down of the housing market in no less time. This continued collapse in the housing prices may, however, lead to the relaxation of the stringent real estate legislations in Toronto and hold off tightening for the time being. Meanwhile, this collapse has facilitated the real estate in areas like Vancouver that have seen a significant rise in investments, both from national and international investors.
Currently, the average purchase prices are at such a low that they are almost 17.4% less than what was seen in the peak season in April. It should, however, be noted that this figure is quite higher than last year. Even at its lowest, the prices are 7.4% more than last year’s benchmark.
Some realtors have also pointed out that the trend of rise and fall is not the same in all sections of the real estate market. In fact, some segments are more stable and compact as compared to the others. It is also not possible to predict the current trends based on the previous year’s observation. Therefore, this could be a golden time to set up an informative real estate website to guide the consumers with the property market in Canada. RealtyFocuz can be of help as they help build MLS websites for realtors who are willing to stay ahead of their competitors and present the most updated list of investment opportunities to their clients.
A representative of the Royal LePage Real Estate services, Shawn Zigelstein, was reported as saying that when the higher prices are experiencing a major fall, the same thing is bound to happen with average prices as well, only at a more rapid rate. No wonder the average prices for detached property are on a constant decline, mainly in the suburban areas.
Toronto has, however, seen a drastic slump in the market prices. Even up till the starting weeks of the month of July, the regular detached homes sold for around $1,105,333. This was a hike of 6.6% as compared to what was seen in the previous year. However, when compared to this year’s rate, it is still 3.8% lower than the prices recorded at the month’s end in June. During April, the detached homes in Greater Toronto Area sold for $1,205,262. Despite being the peak rate, it is still not as high as last year. RealtyFocuz has calculated the drop to be almost 45% when compared to the previous year; this is also a clear indication of the 2017 market price slump in Toronto.
No real estate website has mentioned any sector evading this price slump. Even the condos sector seems to be adversely affected. During The starting weeks of the month of July, condominiums sold for as high as $512,145 in the region of Greater Toronto. This was a good development with an increase of 26.5% from last year’s rates. However, soon after June, the prices got down to 1.5%. The realtors have been predicting that the second half of the year may be going almost flat.
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The regulators have therefore been making efforts to change the borrowing regulations in Ottawa so that more consumers are attracted into the loan schemes, which would, in turn, allow the realtors to boost real estate prices. The slumping prices are already set to put pressure upon the Financial Institutions for a change in fiscal policies. The goal is to delay the changes that could lead upto the loss of potential borrowers. A new rule has also been called wherein a consumer with excess of 20% equity are required to be qualified.
It had been made mandatory for the consumers who are lesser than 20% down to have their mortgage insurances approved by Ottawa. Back in 2016, tough rules were imposed, and a higher rate was imposed by the Government for the qualification. In July, there was an announcement in regards to the tightening of rules for the non-insured buyers and market. This would also include any person with properties exceeding $1 million.
A senior economist at the Royal Bank of Canada, Robert Hogue, reportedly said that the trend in the buying and selling was very much unpredictable in the current scenario. Six months ago, the regulators had been worried only about the rising prices. Therefore, no one can be sure about the extent of the price fall. In addition to that, there is also every chance that this price drop could spread to other parts of the country as well. This is one of the reasons why there is an urgent need to look into the changes to be made in the insured mortgage department.
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