Hot Seller's Market Begins To Cool - 16 New Rules to Impact Real Estate

Monday May 08th, 2017


Will the new housing rules lead to a GTA crash? 

I've detailed below how Premier Wynne's new rules are going to impact the housing market. Don't let media scare you. There is nothing in the new rules that will negatively impact our market.

The same can't be said about the media's coverage of the real estate market, striking fear in the hearts of buyers. Be informed - Don't believe the HYPE. 

Despite housing prices increasing 24.5% from the same time last year in April, the actual number of sales is down by 3.2%. Sellers wanting to take advantage of high prices have recently increased the number of new listings by 33.6%. This is a significant positive for buyers.

If you are a buyer, now is the time to get back out there and start looking. There are fewer showings and fewer offers on properties now then there have been all year. You will have less competition buying your new home and are likely to avoid multiple bids at this time.

Sellers - it is still your market but homes that are not staged, not properly marketed or not priced properly are not getting offers. Ensure your home is poised to be in the best condition possible in the current market and you will still sell your home for record highs. 

Continue reading below to find out what the 16 new rule changes are and how much foreign buyers are really impacting Ontario Real Estate Market. 




Evelyn Lacerda, SALESPERSON
Real Estate | Relationships | Results

Timing The Market? Here's What You Need To Know
"The non-resident tax has nothing to do with new Canadians and people who want to make Ontario their home. This tax, we are targeting people who aren't looking for a place to raise a family - they're looking only for a quick profit or a safe place to park their money." - Kathleen Wynne

All three levels of government met Tuesday, April 18th to decide on an action plan that will cool our overheated Real Estate market. Many of the changes will certainly cool our market and shift the weight from a HOT Sellers market to a more balanced market. 

What does a balanced market mean? To sum it up, we could see listings on the market for 30 plus days, little presence of multiple offers, more inventory to choose from and more conditional offers versus the firm offers we have recently been used to.

A recently published article by CBC News gives a bit of insight on the new changes:

"The Ontario government has announced what it calls a comprehensive housing package aimed at cooling a red-hot real estate market. Here are the 16 proposed measures":

Actions to Address Demand for Housing

1. A 15 percent non-resident speculation tax (NRST) to be imposed on buyers in the Greater Golden Horseshoe area who are not citizens, permanent residents or Canadian corporations.

Actions to Protect Renters

2. Expanded Rent Control that will apply to all private rental units in Ontario, including those built after 1991, which are currently excluded. (This has been in place for properties built before 1991 for a significant time - all but two of my personal investment properties have been under this rule and it has not negatively impacted my investments whatsoever.) Over the past decade, the increase has averaged two percent and is capped at a maximum of 2.5% annually.

3. Updates to the Residential Tenancies Act to include a standard lease agreement, tighter provisions "landlords own use" evictions, and technical changes to the Landlord-Tenant Board meant to make the process more fair, as well as other changes.

Actions to Increase Housing Supply

4. Leveraging the Value of Surplus Provincial Land Assets. A program to leverage the value of surplus provincial land assets across the province to develop a mix of market-price housing and affordable housing.

5. Introduce a Vacant Homes Property Tax. Legislation that would allow Toronto and possibly other municipalities to introduce a vacant homes property tax in an effort to encourage property owners to sell unoccupied units or rent them out.

6. Property Tax for New Apartment Buildings. A plan to ensure property tax for new apartment buildings is charged at a similar rate as other residential properties.

7. A Five-Year, $125-Million Program aimed at encouraging the construction of new rental apartment buildings by rebating a portion of development charges.

8. Flexibility for Municipalities when it comes to using property tax tools to encourage development.  For example, municipalities could be permitted to impose a higher tax on vacant land that has been approved for new housing.

9. The creation of a new Housing Supply Team with dedicated provincial employees to identify barriers to specific housing development projects and work with developers and municipalities to find solutions.

10. An effort to understand and tackle practices that may be contributing to tax avoidance and excessive speculation in the housing market.

11. A review of the rules real estate agents are required to follow to ensure that consumers are fairly represented in real estate transactions.

12. The launch of a housing advisory group which will meet quarterly to provide the government with ongoing advice about the state of the housing market and discuss the impact of the measures and any additional steps that are needed.

13. Education for consumers on their rights, particularly on the issue of one real estate professional representing more than one party in a real estate transaction.

14. A partnership with the Canada Revenue Agency to explore more comprehensive reporting requirements so that correct federal and provincial taxes, including income and sales taxes, are paid on purchases and sales of real estate in Ontario.

15. Set timelines for elevator repairs to be established in consultation with the sector and the Technical Standards & Safety Authority.

16. Provisions that would require municipalities to consider the appropriate range of unit sizes in higher density residential buildings to accommodate a diverse range of household sizes and incomes, among other things." -

Questions about how any of these new changes could affect you? Don't hesitate to call me directly at 416 706-4400. 

New Toronto Real Estate Data Raises Questions About Tax on Forein Buyers
The Toronto Real Estate Board (TREB) says there is fresh evidence indicating that speculation and foreign ownership make up a small component of the city’s housing market, raising questions about the need for Ontario’s plan to tax foreign speculators.

The board released new data on foreign buyers at the same time as it reported that prices continued to soar last month, though there were signs the market is cooling as the number of transactions slipped.

TREB says that between 2008 and April 2017, the average share of foreign buyers of properties in the Greater Golden Horseshoe region, which stretches from the Niagara Region to Peterborough, ON, was 2.3 per cent.

It says during the same time period, the share of homes that were bought and sold within one year of the original transaction – an indication of speculative activity – was also low.

In 2016, less than five per cent of transactions fit that definition, while in the first four months of this year, it went up to seven per cent.

TREB says its analysis was based on property assessments and land registry data in the province.

The new data came as the average price for all properties in the GTA last month rose to $920,791, an increase of 24.5 per cent compared to a year ago. That was slightly below the 33.2 per cent year-over-year increase in prices in March.

TREB says there was a dramatic increase in the number of new listings, which rose by 33.6 per cent since April 2016. But it also found the total number of sales in the Greater Toronto Area in April was down by 3.2 per cent from a year ago.

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