According to a November Ipsos survey of TREB agents, it concluded that only 5% of all homes in the GTA, were purchased by foreign buyers. It also stated that more than half of those who were foreign buyers, bought the homes for themselves or for family members.
In 2016, there were 113,133 residential real estate transactions. Which means approximately 5,600 of these transactions were from the foreign buyer. Due to this discovery, it is believed that imposing the foreign buyer tax credit would not make much sense. The increased home prices are coming from our residents, those that live in these areas and are willing to pay top dollar for their dream homes.
Homes in the Toronto and surrounding areas, is thought to increase by $100k this year alone. That is an increase of 10-16%. That would mean the average price of a home in December of $730,00 would grow to $825,000 on average this year. As with all house markets, detached and semis will experience the strongest annual rates of growth.
With this rate of growth and the mortgage changes that took place a few months back, it is expected that home buyers will save more than the 20% for their down payment. They will use various sources to come up with this money. Many will use a combination from their savings, RRSPs, equity from their current homes and of course gifts from their family members.
Having a substantial down payment and being pre-approved will help home buyers succeed in this market. There will be a huge lack of supply in this up and coming year, even though TREB predicts there will still be over 100,000 units sold in 2017.
Now this is not written to scare the buyers of 2017, but merely to inform you of what is to come in your search for your dream home. If you are unsure of what the market is doing in the area you are looking to purchase, give us a call!