18 REAN DRIVE #305
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Follow Up: 3 Recent Insights from The Ontario Fair Housing Plan 

06.02.2017 | Real Estate Market

It’s only been one month since the Ontario government unveiled their Fair Housing Plan, introducing a foreign buyers tax, rent control, and more for homeowners and renters in Ontario – want to learn more about it? Read through our post from last month here detailing the plan.

At the time, many wondered how this Fair Housing Plan might influence the market in both the short and long term. Would it cool things instantly? How substantial would it be? Would it only cause a blip in the system?

These 3 insights, one month later, are the first signs of what might be a return to “normal” in the Toronto housing market:

Overall Sale Prices 

The overall sale price of homes in Toronto this month has dropped 3.3%, with a drop of 26.3% in the overall sales of single-family homes – according to the Toronto Real Estate Board’s Market Watch. While prices are still higher than a year ago, this dip is a change of pace in a market that felt like it was only ever on the rise.

Falling prices might point towards a cooler market – or it may just be an aberration, a slight dip before prices start climbing again. While it might be too soon to tell, for now, we can see that this drop can – and has – influenced the market.

More Listings 

Even as overall sales dropped, there have been 42.9% more listings hitting the market when compared to last year’s numbers. The logic behind this is that sellers are re-listing their houses after not receiving multiple offers. The previous seller’s climate resulted in multiple offers for well above asking, and those expectations have not disappeared (even as the market potentially cools).

Sellers do not want to feel like they are getting less than optimal value for their home, the same way that buyers do not want to feel tricked into buying at the height of the market (especially before a significant drop). This has resulted in fewer sales, more listings, and frustrated parties on both sides of the spectrum.

Consumer Confidence

According to the Bloomberg Nanos confidence barometer, which is essentially an evaluation of consumer confidence in the marketplace, 45.5% of Canadians are expecting housing prices to drop in the coming months – compared to 50.1% last month (which was an all-time high).

What can we learn from this? Well, it speaks to the fact that the psychological effects of the plan’s release could be shifting the market. Consumers are confident housing prices will drop, so they are more willing to take their time. It is a bit of a self-fulfilling prophecy, where homeowners are spooked into selling and buyers are empowered to take their time.

 

Do you feel prepared to navigate the changes in the Toronto real estate market? Work with us, and you will gain access to the knowledge that can help whether you are buying or selling your home. Our team of specialists know the market, and we put that knowledge to work for you. Contact us at info@christensengroup.ca, or call at 416-441-2888, and we would be happy to help. 

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