In January, the Toronto Real Estate Board (TREB) released its first-ever Market Year in Review & Outlook Report, which includes a number of interesting predictions for real estate trends in the year to come.
According to the report, which includes a homebuyers survey, 2016 could be another record-breaking year if Toronto hits the upper tier of its projected home sales. Between 96,500 and 105,000 homes are expected to be sold this year, with an average selling price between $655,000 and $665,000.
TREB also estimates — perhaps surprisingly — that the low value of the Canadian dollar will have a positive effect for the housing market due to an increase in Canadian exports, which could boost job creation.
Feb. 15 will see the implementation of new government guidelines requiring an increased down payment for government-backed insured mortgages. The minimum down payment will be increased from five per cent to 10 per cent for the portion of a home price that exceeds $500,000 but is less than $1 million (homes $500,000 and under will still require a 5 per cent down payment, and homes over $1 million will continue to require a down payment of at least 20 per cent).
But buyers can breathe a sigh of relief: the report says that the effect of the new down payment requirements will be “not widespread,” a sentiment shared by Toronto realtors.
“I don’t think it’s going to affect our market too much in Toronto,” said Andre Kutyan, a realtor with Harvey Kalles Real Estate. “But it may have an effect elsewhere in the country.”
Gus Skarlatakis, a Toronto realtor with Sutton Group, said some of his customers will have to make a larger down payment as a result of the new guidelines, but that’s a smart thing to do anyway.
“This is just good governance,” he said. “They’re trying to encourage less risky behaviour on the part of the citizenry.”
And although the report says that the first half of 2016 could be very busy as some homebuyers try to make a purchase before the new guidelines take effect, realtors don’t expect the rush to be significant.
Lending pre-approvals are expected to be stricter this year, due to federal government changes to mortgage lending rules, along with stricter capital requirements for loans secured for residental real estate.
The year 2016 will also offer low mortgage rates, as did 2015. However, longer term yields for Government of Canada bonds are expected to increase in 2017.
