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18 Apr

March Housing Data Show Toronto’s Housing Boom, Policy Response Coming

Housing Prices

Posted by: Mary Gronkowski

This morning, the Canadian Real Estate Association (CREA) released its March national real estate statistics showing home sales rose 1.1% from February to March, exceeding the previous monthly sales record set in April 2016. This strength in sales was boosted by a rebound in the Lower Mainland of British Columbia, London and St. Thomas (Ontario) and Montreal. On a year-over-year basis, sales activity last month was up 6.6%, with gains in close to 75% of all local markets. Sales in the Greater Toronto Area (GTA) showed continued strong gains, which offset a decline in Vancouver. Even there, however, the decline in the number of homes changing hands has slowed as the lagged effects of the 15% tax on foreign purchases seems to be dissipating. Many suggest that the Vancouver housing market has bottomed.

Today’s March data had been delayed by the Easter holiday and ironically they have been released on the very day that federal Finance Minister Frank Morneau and Ontario Finance Minister Charles Sousa along with Toronto Mayor John Tory are meeting to discuss ways to slow the Toronto housing juggernaut. Many expect the Ontario budget on April 27 to include at least some of these measures. Actions under discussion include a tax on foreign nonresident home purchases, a tax on vacant property–both of which have been introduced in Vancouver–as well as a tax on investors (speculators) who flip properties and the possible extension of rent controls. The lack of supply in both the sales and rental markets will also be discussed.