All posts tagged toronto

Will Montreal be a new real estate market hotspot in 2017?

Published September 5, 2016 by Real Estate Leads

As a result of the new tax, that came into effect early August, on foreign buyers in Vancouver, many real estate agents have predicted a spillover effect into other Canadian markets.

As can be seen from result of the next tax, there has been a recent slide on Vancouver home sales:

REL- VancouverAugustHousingSlide

It is speculative, but it is still not clear if Montreal, presumed by many to be the next hotspot in the lowering tide of Vancouver’s market, will experience such an effect. Where, if anywhere else, will the Chinese investors move to?

The market in Montreal is still nothing compared to what’s been happening in Vancouver & Toronto.

The new 15% tax, which took effect 3 weeks ago, was put forth by the BC government, with the apparent on the surface intention of improving home affordability conditions for native and resident Canadians who wish to purchase a home in Vancouver, with still about the highest home average prices in such a major city, per square foot, in North America. A similar new taxation event appears to be on the horizon in Toronto.

The Finance Minister of Ontario, Charles Sousa, recently said that he is closely examining the possibility of a similar tax in Toronto to also address the East coast city’s similar rise in home prices over the past couple of years. Real Estate agents have also argued that the new foreign buyers tax in Vancouver could entice them to look into investments in other cities; such as Toronto – and Montreal.

Until such a similar Toronto tax is imposed, Toronto and potentially other markets like Montreal, will start to become more attractive, because of the lower price tags. A close eye will be kept on the Montreal market, to see if any market radar activity is induced by foreign investors. Montreal hasn’t yet been visibly targeted by foreign buyers.

This past month, in an August 2016 report, the CMHC stated the quantity of foreign investors within Montreal is rather small and mostly concentrated in condominiums downtown. The report boiled down that about 1.4% of condominiums in the Montreal region were currently owned by foreigners; but the number is nearly 5% downtown. In Montreal, residents of the US & France accounted for the majority of foreign buyers; with China and Saudi Arabia accounting for less than 14% of them all.

It is indeed difficult to forecast whether the Vancouver tax will change the status-quo much in Montreal. So far in Montreal, foreign real estate buyers have operated on a much smaller scale – most of them being “mom & pop investors” and people from France who have found for a more affordable lifestyle in Montreal.

Estimated average home prices for July 2016: Montreal: $311K, Vancouver: $918K, Toronto: $648K

Montreal will likely not be on the hit-list for a foreign-real estate tax for at least the next decade – but Montreal agents may start experiencing greener pastures soon.


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Recent talk of putting some control on the demand side of foreign investment in Canada

Published June 27, 2016 by Real Estate Leads

Foreign investment is not the only problem with Vancouver’s stratospheric prices but proper taxation would help to fix Vancouver & Toronto’s home price inflation.

The most drastic fix, now being talked about, is to put a cap on Vancouver’s seemingly out-of-control home price inflation through some taxation on foreign real estate investors. It is logically about the most the effective way to simmer down Vancouver’s epic market rise; without precipitating a market collapse.

Stopping foreign investment entirely is not a nice, nor effective solution, as foreign investment is only one of the drivers of high prices; but it has been a quite noticeable one indeed.

So if our politicians can get their minds properly wrapped around the issue then some intelligent new taxing regulations could effectively put a damper on the recent run-away market behavior – which most experts are saying is a bubble that will eventually suddenly/remarkably pop.

When investors come in and purchase real estate who actually have no intention of living, nor working, in Canada, but instead principally as a profit-generating investment – that is the problem that needs to be addressed. A portion of the foreign investors are only involved to transfer funds internationally and/or make quick money.

In a nutshell what is being discussed is “taxing speculative activity”.

Australia and New Zealand & and other areas experiencing similar housing problems have successfully implemented foreign ownership tax rules and laws. Australia has made a rule that restricts foreign investors to purchase only *brand new* developments.

Australia is saying, that if you build something new, at least they are creating some extra GDP – some economic momentum, employing people, adding something to the economy for the benefit of all. If they are just playing the resale market, then they really not adding anything to the economy – only higher prices.

Vancouver faces a fundamental supply problem, as do many other large cities such as Toronto; so solutions like taxation are limited in how effect such changes may have.

Vancouver is an island … from a real estate perspective. In Vancouver, the supply can not be soon expanded, but taxation of foreign-non-resident speculation can help control Vancouver’s staggering home price inflation.

A solution to the drastic home inflation trend being seen in Vancouver and Toronto can be found by discouraging demand.

These aren’t our ideas – just a summary of what we see being discussed on real estate forums. What are some of your ideas? We would love to hear from you.

RealEstateLeads not only wishes to provide you new leads in real-time, but also pertinent and fresh market knowledge through our weekly updated blog.


Simmering hot Vancouver and Toronto markets push Canadian home sales higher in 4Q

Published November 30, 2015 by Real Estate Leads

Hot Property Home House for Sale Real Estate Building Sign
Over the course of the past year Toronto home sales gained 3% to 8,620. Vancouver home sales rose by 7.6% in October to 3,748; for a gain of 19% from 1 year ago.

Canada’s home sales figures expanded in November to the 2nd highest levels in 6 years as demand held strong in the persistently hot home markets in Vancouver and Toronto metro areas.

However, the upward momentum wasn’t shared across the provinces. There were a number of markets where sales posted a monthly increase and those where sales fell, about evenly split. Across the country, overall this past year, sales rose 0.1%.

Prices in Vancouver metro were up 15.4% over the year. Greater Toronto was up 10.4%.

Prices for homes nationally as sold in October was $454,867, up 8.2% driven by the Toronto and Vancouver markets.

Aside from the Toronto & Vancouver markets, the average was $338,923, up 2.4% from a year ago.

Bank of Montreal’s chief economist’s have reported that the housing market has split into 3 basic groups: 1) Vancouver and Toronto – hot as an oven baking bread, the Prairie areas sagging along with the decrease in price of oil, and a middle-ground group that includes areas like Montreal and Ottawa. Saskatoon, Regina , Edmonton, Calgary had all posted double-digit sales declines in October and so far in November. Strikingly, Calgary’s home sales decreased 36% per cent from the past year; similarly across much of Alberta & Saskatchewan.

Crude oil prices are currently around $45(US) per barrel after a climb up to about $62(US) a barrel back in June. Over the year, the price of crude has dropped majorly from above $110(US) one year ago.

Canadian buyers are still in the market mostly to buy detached homes; which have been in short supply in Vancouver and Toronto. At the end of October there were 5 1/2 months of national inventory, down from 5 3/4 months in September. The smaller supply and constant demand has ebbed home prices higher; despite the options in term of the availability of condominiums.

This past October saw a greater divergence of Vancouver pricing from the whole rest of the country.

Sales-to-new listings ratio was 58% in October across Canada. A sales-to-new listings ratio between 40-60% implies generally consistent and balanced housing market conditions.

What do you think the future is going to bring for all these markets? We’d love to hear your opinions. Free free to give us a call, even just to say hi, at 1-800-728-6577.