Category: (2)

Toronto Real Estate Board President Larry Cerqua announced that Greater Toronto Area REALTORS® reported 9,902 sales through TREB’s MLS® System in September 2016. This result was up by 21.5 per cent compared to September 2015.

For the region as a whole, strong annual rates of sales growth were experienced for all major home types. The pace of detached sales growth was slower in the City of Toronto and the number of semi-detached sales was down compared to last year. In both cases, the year-over year dip in new listings was likely the issue.

“We continued to see strong demand for ownership housing up against a short supply of listings in the Greater Toronto Area in September. The sustained lack of inventory in many neighbourhoods across the GTA continued to underpin high rates of price growth for all home types,” said Mr. Cerqua.

Both the MLS® Home Price Index (HPI) Composite Benchmark and the average selling price for all home types combined were up strongly on a year-over-year basis in September. The MLS® HPI Composite Benchmark grew by 18 per cent compared to September 2015. The average selling price was up by 20.4 per cent to $755,755. It is important to remember that the MLS® HPI provides a price growth measure for a benchmark home, thereby allowing for an apples-to apples comparison from one year to the next. The average selling price can be influenced by changes in both market conditions and the mix of homes sold. View Stats here: september-stats-2016

“The Toronto Real Estate Board will be closely monitoring how the recent changes to Federal mortgage lending guidelines and capital gains tax exemption rules impact the housing market in the Greater Toronto Area. While these changes are pointed at the demand for ownership housing, it is important to note that much of the upward pressure on home prices in the GTA has been based on the declining inventory of homes available for sale,” said Jason Mercer, TREB’s Director of Market Analysis.

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The government has implemented these new restrictions to TRY and slow down our booming Toronto and Vancouver markets. We may see a moderation in home price appreciation year over year, that is not to say that the markets are going to decline, maybe just a slower appreciation in value (ie. Homes in the GTA increased 21% year over year.)

Essentially the changes only affect 25% of the market, being purchasers placing less than 20% down. When placing 20% or less it will cause your lender to require mortgage insurance. The new rules directly affect this group, and will limit their spending.

When it comes to the market, the most important thing to remember is that this whole thing is about demand, and we have to remember that housing inventory is still down 30% year over year.

The qualifying rate 4.64% is much different than the contract rate, typically about 2.44% (the actual amount) Meaning the amount people are paying for borrowed money does not change. Meaning affordability stays the same. Also important to note is the Bank of Canada rate has stayed at 0.5%, nothing has changed there to slow down/ speed up markets. This Drives the Prime lending rate; the bank adds 2.2% = 2.7%

Ask us for an easy to understand chart to see what you would qualify for based on your income. Your GDS and TDS ratios need to work of course. Have you been pre-qualified?

Don’t forget…if you don’t have 20% down-payment it’s not the end of the world. There are always creative ways to get it done. Whether it be a loan from family to get you up to 20%, or purchasing for a lesser price. Regardless, it doesn’t cost anything to get pre-qualified, so I highly recommend it so you know where you stand, and we can come up with a game plan.