With housing affordability being a major concern for GTA homebuyers, many will be wondering what to expect from the market going forward.
According to Royal LePage’s recently released House Price Survey and Market Survey Forecast, the Greater Toronto Area was characterized as “Canada’s least healthy” in the first quarter, though performance was healthier in the second quarter.
Overall, Canada’s residential real estate market posted robust home price gains in the second quarter, with the majority of metropolitan markets across Canada displaying “expansionary trends” according to the survey.
The GTA/905 market has been experiencing much slower sales activity. This slowdown has a lot to do with decreasing affordability and more stringent government legislation (namely the 15% tax on foreign buyers and speculators). Although this could be cause for concern, the survey points out that these changes are bringing balance to Canada’s largest market, and slowing home price appreciation within the region.
“In the quarter, sanity began to return to the GTA, where a slowing of both price appreciation and sales activity was evident,” the survey said.
“The rate of national house price appreciation that we experienced in the second quarter continues to be above what we would consider a normal range, driven primarily by very strong year-over-year price growth across much of Ontario,” said Phil Soper, president and CEO of Roya LePage.
“Yet the GTA’s recent drop in sales activity may well signal calmer waters ahead for the province. The 20 to 30 per cent year-over-year increases in home values that characterized Toronto and its adjoining areas in recent months are not, in our view, sustainable or healthy. Now, as inventory inches higher and demand slows to a more orderly pace, some much needed balance has been returned to the market.”
For the first time in years, buyers are able to insert reasonable conditions in their offers and multiple bid situations are somewhat less frequent, Soper added.