Photo: James Bombales
Toronto’s new and resale housing markets are following a similar path as buyers, sellers and builders respond to Ontario’s Fair Housing Plan, suggests BMO.
“Toronto’s prices slowed in the month after the Ontario Government’s policy changes (that included a foreign speculators’ tax), but still rose impressively,” writes BMO Senior Economist Sal Guatieri in a note titled “New Home Prices, Same Old Themes.”
“The latest data, which are based on contract signings, support the soft, rather than hard, landing scenario for the region,” Guatieri continues, referring to Statistics Canada’s New Housing Price Index, May 2017.
The index, based on a survey of builders, tracks selling prices for single-family and semi-detached homes as well as town and row houses. It showed new-home prices climbed 1.1 per cent in May compared to the month before.
“Builders linked higher prices to market conditions, a shortage of developed land and higher construction costs,” says Statistics Canada.
That was the greatest gain of any of the 21 census metro areas surveyed. But the robust growth was nevertheless a marked slowdown from the previous month.
In April, new home prices in Toronto were up a roaring 2.1 per cent on a month-over-month basis.
Beyond Toronto, Guatieri notes how Vancouver’s new home market is also mirroring its resale segment, which has recently been showing signs of reheating nearly a year after BC had imposed a foreign-buyer tax for Metro Vancouver.
In May, Vancouver new-home prices climbed 2.2 per cent from April, the third monthly increase Statistics Canada has observed in the market.
“New home prices in May supported what we already suspected about Vancouver’s housing market: it’s starting to recover after digesting the foreign buyers’ tax of last summer,” writes Guatieri.