Money What it was like to get caught in Toronto's record housing slump

16:07  12 april  2018
16:07  12 april  2018 Source:   Bloomberg

Toronto homes sales, prices slump in March

  Toronto homes sales, prices slump in March Toronto homes sales sagged in March, tumbling 39.5 percent from the previous year, as tighter mortgage rules and higher borrowing costs dampened demand, data showed on Wednesday. Sales of detached homes plunged 46.3 percent and condo sales dropped 32.7 percent, as many would-be buyers put their plans on hold, the Toronto Real Estate Board (TREB) said.The average selling price in the Toronto area was C$784,558 ($613,799), down 14.3 percent from C$915,126 in March 2017, though up 2.1 percent from February 2018.The average selling price for a detached home, the most expensive segment of the market, plunged 17.

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Like A Tourist. 2 Minutes To Transform. Salute. How To Catch A Financially Unfaithful Spouse During A Divorce. Living. The housing price slump in Toronto is spreading to nearby cities. What' s Going On In Housing ? Our weekly newsletter delivers the news and analysis you need on Canada' s housing market.

Condominium windows are seen illuminated at night in Toronto, Ontario, Canada, on Friday, May 26, 2017. Canadian mortgage growth is slowing as the country's policy makers step up efforts to cool overheated housing markets in Vancouver and Toronto. With four of Canada's biggest banks reporting second-quarter results, the trend shows that growth in home loan portfolios is easing and in some cases shrinking.: Condominium Construction As Canada Banks See Mortgage Growth Slow Amid Measures© Bloomberg/Bloomberg Condominium Construction As Canada Banks See Mortgage Growth Slow Amid Measures

(Bloomberg) -- Toronto’s housing market has seen a stunning slowdown in the past year. Now one brokerage has cataloged the damage for 988 homeowners who got caught in the eye of the hurricane.

In the space of four months last year, the homeowners lost a collective $135 million (US$107 million) as the median house price slid 18 percent, a faster decline than any major market during the U.S. market crash, according to Realosophy Reality Inc.

The story goes like this: The median house price surged 30 percent from January to peak at $765,000 in March, largely driven by investors who were pouring money into the market for quick returns, Realosophy said in a report. To tame the beast, the government instituted a series of regulations, including a foreign buyers tax, starting in April.

Toronto’s housing bubble cost sellers $136 million: Report

  Toronto’s housing bubble cost sellers $136 million: Report Toronto’s housing bubble cost sellers $136 million: ReportThat cost was borne by sellers caught in real estate transactions that didn’t close after property values began dropping last spring, says a new report on the fallout from the extradordinary rise and fall of the Toronto region’s recent housing market.

It 's clear Toronto ' s housing market has a long history of booms and busts. But these aren't Florida- or Nevada-style housing bubbles And one other element is still missing from a Toronto housing bust: A sudden increase in mortgage rates, which has coincided with the city's last two housing slumps .

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Some 866 homeowners had clinched a sale but were not able to close, eventually selling to another buyer later in the year for $140,200 less on average. Some buyers had to walk away as they weren’t able to sell their own homes or the banks appraised the house for less than what they agreed to. Another 122 sellers sold their houses for an average $107,325 lower than what they bought it for earlier. By the time the dust had settled in July, the median price had dropped to $626,000 from $765,000 in March.

Condos Next?

To put that 18 percent four-month decline in perspective, it took major U.S. cities 20 months on average for prices to fall 18 percent from their peaks between 2005 and 2006, with Miami the shortest at 12 months, according to the report.

GTA home sales down 40 per cent in March compared to last year, report shows

  GTA home sales down 40 per cent in March compared to last year, report shows GTA home sales down 40 per cent in March compared to last year, report showsTREB reported 7,228 residential transactions last month in the GTA, a steep drop from the record 11,954 sales reported in March 2017. Last month’s figure is down 17.6 per cent compared to average March sales for the previous 10 years.

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Greater Toronto home prices jumped in September as buyers appeared to put an end to a slump “Tentatively, it looks like the worst is over for the Toronto housing correction,” Bank of Montreal Mr. Guatieri said the decline comes off record levels in 2016, so is not as massive as it looks.

“The rapid rise in investor demand coupled with their rising negative cash flow suggests that a speculative mood hit Toronto, reflected in investors who appeared to believe they could make easy money by buying what they perceived to be a safe and secure asset, single family homes,” Realosophy President John Pasalis said in the report. “When the market unwinded, the areas with the biggest decline had the highest percentage of investors.”

The Toronto homes that Realosophy tracked were low-rise, largely detached homes with an average of 135 days between the first and second transactions. The average decline in prices for the properties was 12 percent, though some Toronto region suburbs saw a deeper plunge than others. A total of 1,784 properties that were sold in 2017 and subsequently relisted did not sell, according to Realosophy.

For now, prices have largely stabilized for detached-homes. But there’s a new hot spot to watch out for: Toronto’s condominium market has seen prices soaring about 20 percent since last February and is a target for speculative investment.

Who are the foreign condo investors in Toronto? A new study sheds some light

  Who are the foreign condo investors in Toronto? A new study sheds some light Who are the foreign condo investors in Toronto? A new study sheds some lightUntil now, not much has been known about the largely invisible ranks of condo investors, nearly half of whom feed the region’s vacancy-hungry renters by leasing their properties.

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Lenders like Atrium pool money from wealthy individuals to lend to borrowers unable to access cheaper bank credit. What can 0,000 get you in Toronto ' s property market? WatchWe just got the first real picture of the Toronto housing market — and it ’s ugly.

“The condo segment is probably the one thing that’s potentially going to cause some vulnerability in the market in Toronto,” Pasalis said. “But everyone’s been calling for a condo crash in Toronto for 10 years -- it’s hard to predict.”

To contact the reporter on this story: Natalie Wong in Toronto at nwong133@bloomberg.net.

To contact the editors responsible for this story: Daniel Taub at dtaub@bloomberg.net, David Scanlan at dscanlan@bloomberg.net, Jacqueline Thorpe

©2018 Bloomberg L.P.

(Note: All figures in U.S. dollars. Check out our Currency Converter for the latest values.)

House Prices In Canada Are Now Under The Control Of Global Forces .
Housing markets, most realtors will tell you, are local. When it comes to residential real estate, Vancouver is nothing like Halifax, which in turn is nothing like Quebec City. Each housing market reflects the realities of its community: Prices for the most part reflect what people are earning, and how much they can get a mortgage for.

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