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FTHBI in Toronto

Could the FTHBI Be Used in Toronto?

By: Zoocasa

Housing prices in major Canadian cities have skyrocketed in recent years. First-time home buyers have found it increasingly challenging to get a foothold on the property ladder.

Sold house prices in Toronto have climbed to an incredible $1.3 million. An alternative used to be for first-time buyers to purchase a smaller, less expensive property type, such as an apartment. But now even that option is increasingly out of reach for most. Condos for sale in downtown Toronto now go for over $600,000 and in some popular neighbourhoods, like Liberty Village condos for sale, units are going for over $700,000. The situation is similar in the Vancouver market.

Buyers are even finding it hard to leave the major cities for smaller, cheaper markets. Unfortunately, few smaller cities offer sufficient job opportunities for that to be a realistic option. Canada’s population is simply too low and spread out to support multiple, robust economic landscapes. In addition, spillover from the Toronto and Vancouver has raised housing prices within an hour drive in every direction, so that even previously affordable communities are no longer so.

A New Housing Affordability Program From the Federal Government

For these reasons, the federal government decided to step-in.

Ottawa announced the First-Time Home Buyer Incentive in March, and recently clarified how it will work.

Essentially, the government hopes to make home buying more affordable by giving first-time home buyers an interest-free loan in exchange for equity in their property.

The program will provide up to 5 per cent of a resale home purchase price, or up to 10 per cent toward a new build.

To qualify, buyers must have a household income of less than $120,000 and must have saved up a 5 per-cent down payment on their own. Their mortgage must also be limited to four times their income, so must be capped at $480,000, for a total purchase price of $505,000.

In 25 years, or when the buyer sells the home, they will have to repay the loan as a percentage of the purchase price. The benefit to the program is that buyers with lower incomes will still be able to afford their monthly payments since they will be borrowing less than they would have otherwise.

The main issue though, is that the program’s low purchase price cap of just $550,000 is hardly enough to afford even a condo in any major city. In fact, Zoocasa estimates that there are few neighbourhoods in Toronto in which even a condo can be purchased for that price. (check out the infographic below to see exactly where).

FTHBI in Toronto

The program is most likely to benefit residents of small towns, or in big cities in the prairies and eastern provinces.

Zoocasa.com is a real estate company that combines online search tools and a full-service brokerage to empower Canadians to buy or sell their homes faster, easier and more successfully. Home buyers can browse real estate listings on the website or the free iOS app.

Toronto's Skyline

Home Sales Soar while New Listings Remain Flat: June TREB Report

By: Zoocasa

The GTA real estate market continued to experience supply and demand issues throughout June. Home sales surged while new listings brought to market remained stagnant, despite market-cooling efforts put into place in recent years.

Numbers from the Toronto Real Estate Board documented a total of 8,860 transactions in June, marking a considerable 10.4% year-over-year increase. New listings, however, were virtually unchanged, with 15,816 homes brought to market – a dip of just 0.3%.

This has prompted price increases, with listings standing at an average of $832,703, a jump of 3% from sold prices in Toronto last year. The MLS Home Price Index also reported a home value increase of 3.6%. Much of this price growth was influenced by higher-density home types such as condos, townhouses, and semi-detached houses.

Growth in the 905 Markets

A large proportion of the region’s growth occurred outside of the City of Toronto, as sales boomed by 14.3% in the 905 markets with 5,659 homes changing hands. A small 2.2% decrease in new MLS listings also helped boost prices by 2.1%, to an average of $785,879. This has tightened overall buying conditions as the sales-to-new-listings ratio (SNLR) increases to 54%. This is tighter than last year’s 46%, but still within balanced territory.

Growth was less dramatic within the 416, with sales rising a steady 4.1% and 3,201 transactions taking place. New listings also rose – by a moderate 3.4% – and the average home price climbed by 5.1% to $915,481. Overall, the market still favours sellers with an SNLR reaching 59%, up by just 1% from last year.

The total TREB area has an SNLR of 56%, up by 6% from 2018, but remains within the realm of balanced. This shows that buyers are withstanding the slowdown that was prompted by the Ontario Fair Housing Plan and the mortgage stress test.

Increased Pressure on Condo Market, TREB Reports

TREB’s market analysts remain apprehensive about the prolonged shortage of new listings, especially among the region’s medium-density homes that typically fill the gap between starter condos and detached houses.

TREB’s CEO John DiMichele explains that as buyers overcome the affordability challenges presented by the mortgage stress test, it will continue to front-load the already tight condo market since more expensive home types, like single-detached homes, are out of reach. This will further limit the number of affordable entry points into the GTA market, even after homeowners have the chance to build equity.

“While some home buyers may have adjusted to the OSFI stress test by looking to more affordable housing options, this could present an issue over the longer-term because we aren’t adding a meaningful amount of new mid-density housing supply to bridge the gap between condominium apartments and detached homes,” he explained.

“Finding ways to add more mid-density housing types to existing neighbourhoods and new developments needs to be a key component of municipal, provincial, and federal housing plans and policies moving forward.”

GTA June Sales and Price Trends

Want to learn about sales and price trends in Toronto and the overall TREB area? Check out the infographics below to observe year-over-year patterns.

treb-home-sales-prices-june-2019

toronto-home-sales-prices-june-2019

Zoocasa.com is a tech-first real estate company that combines online search tools and a full-service brokerage to let Canadians purchase or sell their homes faster, easier and more successfully. Home buyers and sellers can browse listings on the site, or with Zoocasa’s free iOs app.

May 2019 TREB

Home Sales Up by Almost 20% During May: TREB

For the second month in a row, the Greater Toronto Area experienced double-digit growth in home sales. A total of 9,989 homes were bought, which was an increase of 18.9% from the same time in 2018. Further, sales increased by approximately 10% from the previous month.

While the increase in sales looks promising for Toronto’s real estate market, it is important to note that sales are still below the 10-year trend for the month, which is usually over 10,000 homes sold.
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OFHP Scholarhood

2 Years Later, York Region Hardest Hit by Fair Housing Plan

By: Zoocasa

York Region was hit hardest by the Ontario Fair Housing Plan introduced two years ago, reports Zoocasa, while Windsor and London home prices have grown substantially.

Those are just a few of the findings the online brokerage discovered when they examined how the 16 measures introduced by the former Liberal provincial government affected the province’s housing market.

The measures included a 15-per-cent foreign buyer tax for non-residents, rent controls for new builds and incentives for developers.
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Income to Afford a House Across Canada

The Income Required to Purchase a Home in Toronto

By: Zoocasa

Are you interested in buying a home in Toronto? If so, you’ll need to be among the top bracket of income earners, according to a recent report by Zoocasa.

The report states that only the top 10% of income earners can afford to purchase a house in Toronto, at a benchmark price of $873,100. This means that someone would have to obtain an income of $124,554 in order to afford a home of this price.

Toronto is one of the most expensive places to live in all of Canada, second only to Vancouver. To buy a house there, residents are required to have an income of $205,475, which is among the top 2.5% of income earners. Homes are out of reach for nearly everyone residing in this coastal seaport city. These dramatic real estate prices can be attributed to the ever-increasing population densities in both Vancouver and Toronto.
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April TREB numbers

Real Estate Sales Heating Up for Spring – April TREB Report

By: Zoocasa

After a prolonged dip in real estate sales, the Toronto Real Estate Board (TREB) is happy to report that sales are beginning to increase within the Greater Toronto Area. Houses for sale in Toronto jumped by 11.3% since March, while year-over-year home sales have increased by 16.8%. Toronto’s real estate market conditions have slightly increased towards a ratio of 56%, remaining on the edge of a seller oriented market. The overall sales-to-new-listings ratio for all TREB markets has also increased from 47% in April 2018, to 52% in April 2019. The growth of these new MLS listings is much lower than the growth reported for sales. Although this is still within a balanced range, it is something that may tighten market conditions as the months progress.
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GO Train

Here’s What You’ll Pay to Live Close to a GO Train Stop

By: Zoocasa

Living walking distance to your office isn’t an option for most who work in the downtown core anymore. It’s a question of affordability: the average property in Toronto central now goes for about $1.3 million, while condos are almost $600,000.

Many residents are now choosing instead to live within commuting distance to the city. Not only are they likely to get a bigger house on more land, but if they live close to the GO Transit line, they can skip the congestion and traffic and enjoy an easy ride to work.
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Toronto condos in March

Toronto Experiences Slower Condo Market in March

By: Zoocasa

Condo sales posted unusually weak price gains this March, rising only 2 per cent year over year, says a recently released report by the Toronto Real Estate Board.

It’s surprising because since new mortgage regulations came into effect on January 1, 2018, condo prices have been the darling of the Toronto real estate market, rising between 5- 10 per cent year over year every month, even as detached houses softened. But this March, condo prices only grew slightly.

Units in the 416 rose 2.3 per cent to $603,969, while units in the 905 grew 3.3 per cent to $463,774. Condos for sale in downtown Toronto were still the most expensive units across the TREB region, going for $673,220, but are only $20,000 more expensive than in March 2018.
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TREB February Report

TREB Calls For Longer Amortizations to Ease Stress Test: February Report

By: Zoocasa

The Toronto Real Estate Board is blaming a soft housing market on tighter mortgage lending rules — and wants 30-year amortizations back to fire up sales.

Sales declined 2.5 per cent to 5,025 transactions, while property prices edged down 1.5 per cent to $780,400 this February year over year.

“The OSFI-mandated mortgage stress test has left some buyers on the sidelines who have struggled to qualify for the type of home they want to buy. The stress test should be reviewed and consideration should be given to bringing back 30-year amortizations for federally insured mortgages. There is a federal budget and election on the horizon. It will be interesting to see what policy measures are announced to help with home ownership affordability,” said TREB President Garry Bhaura.
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Toronto Luxury Condos

Which Condos are Toronto’s Most Expensive?

By: Zoocasa

While the weight of the Ontario Fair Housing Plan and the mortgage stress test resulted in 2018 being one of the worst years in recent record for the Toronto real estate market, condos saw a boost in popularity among home buyers.

While the average home price fell 4.3% to $787,300 over the year, the average condo saw the most price growth among all property types. With an overall increase of 8.7%, condo prices averaged at $593,366 for 2018.

At the other end of the spectrum, detached home prices offset the increase with a price decline of 7.1%. Semi-detached and townhouses had a slight uptick for price growth at 1% and 2.7%, respectively.
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