The Toronto Real Estate Board is warning against a Vancouver-style tax on offshore home purchasers. More than half of those foreign buyers were purchasing homes for themselves or to house family members, according to a November Ipsos survey of TREB agents.
Don’t blame overseas investors for the high price of housing in the Toronto area, says the Toronto Real Estate Board (TREB).
The board is releasing new research Tuesday showing fewer than 5 per cent of the 113,133 residential real estate transactions in the Toronto region last year involved foreign buyers.
More than half of those foreign buyers were purchasing homes for themselves or to house family members, according to a November Ipsos survey of TREB agents, who acted on behalf of those buyers.
About 25 per cent of the homes purchased by non-Canadians were bought as rental investments.
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The data suggests that a foreign buyer tax such as the 15 per cent implemented in Vancouver last summer would be misguided, says TREB.
communities outside the Toronto area where there is no such tax. It could also further reduce the tight supply of rentals and discourage immigration to the area, said the board.
The survey also found that fewer than 2 per cent of TREB realtors had acted in a sale in the Toronto area that was pushed east by the Vancouver tax.
The cost of a home in the Toronto region is expected to rise substantially — between 10 and 16 per cent — again this year.
That would mean the average price of a home in December of $730,472 would grow to $825,000 on average this year.
That cost was up 20 per cent in December over the same month in 2015.
“Detached and semi-detached houses and townhouses will experience the strongest annual rates of price growth, but the condominium apartment market segment will remain tight as well,” said a TREB press release.
An Ipsos survey of home buyers found the average purchaser expects to put down 27.6 per cent on a home this year, with first-time buyers expected to put about 24 per cent down on their purchase.
While fewer consumers are expected to buy a home this year than was indicated in the previous survey, the number of first-timers expecting to enter the market increased slightly to 53 per cent from 49 per cent.
Buyers indicated they are using various sources for down payments including savings, RRSPs, gifts from family and equity from their existing homes.
TREB said it expects a third consecutive year of more than 100,000 sales forecast but with slightly fewer this year.
The lack of supply will be the biggest impediment to those wanting to get into the market, said TREB officials.
“Active listings at the end of December were at their lowest point since before 2000. It is unlikely that the shortage of listings will improve to any great degree over the next year,” said Jason Mercer, the board’s director of market analysis.
TREB is also expected to release research on Tuesday showing that home values will rise as much as 12 per cent depending on their proximity to GO Transit’s Regional Express Rail improvements that are expected to provide 15-minute, two-way service in many areas.
By TESS KALINOWSKIReal Estate Reporter – Toronto Star
Tues., Jan. 31, 2017