Toronto’s housing market just capped off a second straight record year of sales. Total purchases across the Greater Toronto Area rose 11.8 per cent to 113,133 in 2016, with the dollar value of those transactions hitting $82,578,210,100.
But the president of the regional real estate board isn’t pointing his finger at foreign buyers. Survey data released on Thursday by the Toronto Real Estate Board suggests those international homebuyers account for five per cent of sales in Toronto.
“It is important to point out that the strong demand that we experienced in 2016 was very much domestic in nature,” said Toronto Real Estate Board President Larry Cerqua in a statement; adding a strong local economy, low unemployment and “very low” borrowing costs also contributed to the demand.
The average selling price across the GTA rose 20 per cent in December on a year-over-year basis to $730,472 amid a dearth of inventory as total active listings plunged 48.1 per cent.
And that market dynamic prompted a warning from TREB that prices will keep rising unless policymakers step in to unlock supply.
“If we continue to see record or near-record levels of demand up against very constrained supply, then I think you’re still going to see a lot of upward pressure on pricing,” said Jason Mercer, TREB’s director of market analysis, in an interview with BNN. “And that’s why we’re urging, when we’re talking about policies pointed at the housing market, that you have to look at both sides of that price equation. We’ve looked a lot at demand, not very much at supply. I think that has to change for this year.”
Toronto Mayor John Tory recently told BNN he’s watching the real estate market “very carefully”, and acknowledged surging prices could be “scary” for young people looking to enter the market. But he balked at the idea of intervening hastily in an attempt to cool prices.
“The worst thing we could do for the marketplace and its long-term health is to act in a hasty manner, to do something that’s politically sexy, but that is actually not going to be effective and may even be less than responsible.”