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You’ve probably noticed that the blog has been awfully quiet lately. It’s been a whirlwind of a month, between all of the government intervention and another crazy Toronto November market. In case you’ve fallen behind, here’s what you’ve missed:
Our heads are spinning from all of the changes that have been announced in the mortgage and financing world. We’ve seen:
- New qualification rules for Buyers with less than 20% downpayments who are insured by CMHC (Buyers have basically lost 25% of their purchasing power)
- The removal of the capital gains tax exemption for non-resident Buyers
- Across-the-board interest rate hikes by all of the major banks
- In an unprecedented move, banks are now offering differing interest rates based on a Buyer’s circumstances; interest rates might now vary based on the size of the downpayment, the purpose of the purchase (live-in vs investment), credit scores, property type and employment type.
- New funding rules for lenders that have resulted in the exit or near-exit of a number of providers from the mortgage business.
- National Bank shuttering its broker division, putting 75 people out of work (they owned 2.5% of the broker market)
- Increased interest rates for people looking to refinance (that happened Nov 30)
Changes to Land Transfer Tax
- The provincial government announced an additional $2,000 rebate for first-time Buyers in Ontario, bringing the total available rebate to $4,000. First-time Buyers won’t pay any Ontario land transfer tax on the first $368,000 of purchase. Of course, in Toronto, we still have to pay the Toronto Land Transfer Tax, but there’s a rebate for first-timers on part of that too.
- The rate of Ontario land transfer tax paid on properties over $2 million will increase from 2 to 2.5% for the amount over $2 million.
- Changes to land transfer tax take effect January 1, 2017. The changes are happening so fast that no one seems to know if people who signed agreements prior to the announcement or January 1st are affected or not.
And of course, Trump got elected, which means more uncertainty for Canada and the world.
So you’d think among all this change and uncertainty, Toronto’s red hot market would have cooled. Think again:
- 67% of houses sold over-asking in central Toronto in November
- The average house sold for 111% of the asking price in central Toronto
- Prices across Toronto increased 23% in November vs last year (that’s $144,000 more in November 2016 than November 2015).
- Townhouses were on fire, increasing 24% year-over-year
- The condo market has continued the crazy upswing it’s been on for the last few months. Bidding wars are now the norm in condos (even in some ‘regular’ buildings that were struggling to sell just last year). Condo prices up 15% year-over-year.
- The ‘burbs are on fire. This isn’t entirely surprising, as Buyers affected by the mortgage changes headed further from the city centre where their dollar goes further.
- Pre-construction condos are ON FIRE. New developments are selling out before they even hit the open market. (Pro tip: If you want the inside track, connect with us and we’ll hook you up with the best of the best in pre-construction).
Our team has always been a good barometer of the market, and it’s been our craziest November yet. While we’ve noticed pockets of the city slowing down and there was a particularly slow week at the start of November, we’ve been busy:
- In mid-November, we found ourselves in a 20-person bidding war (we won);
- We’ve competed in countless bidding wars for condos (we won some, we lost some; we’re in the midst of 3 bidding wars as I write this);
- The number of Buyers and Sellers approaching us is at all-time high (yay);
- We’re all really looking forward to things slowing down for the holidays;
We’ve got some fabulous listings coming up in January, so stay tuned for more excitement!