Experts Suggest Canada’s Real Estate Bubble Deflating
Is the property-buying frenzy finally running out of steam? Experts argue that this is indeed the case. For one, sales are down in a large section of a variety of desirable housing markets. In Greater Vancouver, for example, property prices have managed to shrink four percent when it came to detached homes. Toronto, on the other hand, has experienced a near seven percent drop on sales activity between the months of March and April – a trend that has not been seen since 2013.
In addition, there appears to be a lesser problem with housing supply now, compared to just a few months earlier, where the lack of supply compared to the relative demand has been blamed to be the causal factor for skyrocketing home prices over the past year. Now, however, it is clear that current trends are changing, with an increase of more than thirty percent in new homes available for sale in the Greater Toronto Area compared to the same period last year. This increase in home availability on the market has been seen the most when it comes to single-family homes, which have seen a massive spike of fifty percent when it comes to the number of properties available on the market compared to the same period last year. Such activity suggests that more and more sellers are becoming more desperate when it comes to trying to cash in on the market craze that has seen prices skyrocket. Indeed, now as price increases are starting to slow down and even in some cases, potentially decrease, homeowners are now looking to sell.
Finally, the most significant telltale sign of
the market running out of steam has been a lack of activity from the consumers
themselves. According to local realtors interviewed across the Greater Toronto
Area, there are clear signs that buyers are now starting to actually pull out
of the market in light of recent market activity. In other words, it is slowly
becoming clear that prices will soon be more affordable, so many consumers feel
that it is best to wait out the trends and buy at the most effective time.
Could a buyer’s market be on the horizon?
The data suggests that this could indeed be the case at least in the
Greater Toronto Area. The passage of a foreign buyer tax by the Ontario
government could accelerate this process, now that foreign buyers face a
greater financial hurdle compared to local residents.
Published Date: Jun 12 2017