The Canadian Real Estate Association said Thursday it is revising downward its forecast for housing sales in Ontario following provincial measures to cool the market.
“Evidence suggests that housing market sentiment has similarly cooled following housing policy changes made by the provincial government in April 2017. Trends for the province are softening, with home sales and price growth in the Greater Golden Horseshoe region slowing,” the Ottawa-based group, which represents realtors across the country, said in a release.
Ontario introduced a 16-point plan to cool the market with measures that included a 15 per cent non-resident speculation tax in the Greater Golden Horseshoe and expanded rent control rules for the entire province. The tax change followed British Columbia which introduced a 15 per cent additional property transfer tax on foreign buyers in August, 2016.
British Columbia is now adjusting to that tax and CREA raised its forecast for sales in that province in 2017, something expected to offset declines in Ontario. B.C. is still expected to see a nine per cent decline in sales in 2017.
Nationally, the group now forecasts sales to decline 1.5 per cent in 2017 to 527,400. By 2018, sales are expected to decline another 0.8 per cent.
The national average price is set to increase by 7.4 per cent to $526,000 in 2017, led by Ontario which is expected to see a 16 per cent increase for the year which would represent a moderation from where prices are in the province year-to-date. By 2018, CREA says the national average price will increase by 1.8 per cent to $535,400.
CREA also released results Thursday for May and found the number of homes sold via Canadian Multiple Listings service Systems fell by 6.2 per cent from April, the largest month-over-month percentage decline since August 2012.
May sales were down from the previous month in about half of all local markets but the large national decline was driven by a 25.3 per cent month over month decline in the Greater Toronto Area. Activity was down across the GGH region, including Oakville, Milton, Hamilton-Burlington and Barrie.
“Recent changes to housing policy in Ontario have quickly caused sales and listings to become more balanced in the GTA,” said Andrew Peck, president of CREA, in a statement. “Meanwhile, the balance between supply and demand in Vancouver is tightening up, while many places elsewhere in Canada remain amply supplied.”
Gregory Klump, chief economist with CREA, noted May was first full month of results since changes to Ontario housing policy and the evidence is clear that the GGH market conditions are now more balanced.
“For housing markets in the region, May sales activity was down most in the GTA and Oakville. This suggests the changes have squelched speculative home purchases.”
The actual national average price for homes sold in May 2017 was $530,304, up 4.3 per cent from a year ago. CREA says sales activity in Greater Vancouver and Greater Toronto continue to impact that figure. Without those two cities, the national average price is $398,546.
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