It will come as a surprise to no one that the average price of a detached home in Toronto these days is hovering around 1.3 million. Despite that figure, the Ontario Real Estate Association Index that came out last Tuesday indicates that nearly one out of every 2 prospective buyers expects to be purchasing one in the near future. 22% of index respondents said they foresee themselves purchasing a detached home in 2017, and while that number is down from 26% at this time last year, it continues to be a surprising number for a city that is the 2nd least affordable in the country (after Vancouver).
The online Ipsos survey of 1,003 Ontario residents for OREA was conducted between Oct. 27 and 31 and is considered accurate within 3.5 per cent 19 times out of 20.
“People are optimistic about the housing market in 2017. We actually see an increase in people who are looking to buy and an increase in the number looking to sell a home,” said OREA CEO Tim Hudak, mentioning further that the index is based on research conducted twice a year by Ipsos Reid to gauge Ontarian’s perceptions of the real estate market and the economy.
This optimism may be tempered somewhat by governmental changes, however. This is particularly true regarding changes to mortgages, in particular more rigorous qualification requirements and insurance regulations, but other factors contribute as well. “There is a sentiment too among first-time home buyers that some will be forced to put off a decision or look at a smaller-valued home because of the recent changes on mortgage insurance and the stress test,” Hudak added.
He then proceeded to give praise to the Liberal government for doubling the first-time buyer rebate on the provincial land transfer tax to $4,000 on homes up to $300,000, which will clearly be beneficial for buyers. “We’re hopeful the city will match that instead of clawing it back. I remain optimistic about that,” said Hudak, who also applauded the idea that Toronto could raise some badly needed revenue by harmonizing its land transfer charge.
19 percent of index respondents were in the market for a condo too, and as vigorous as the market has been in 2016 we now see half of Toronto area residents say they expect it will be even stronger next year. 52 per cent of Torontonian respondents see the current residential real estate market being favourable, which puts them10 index points up from last year’s survey and residents in the 905-area communities came in at an even better 57 per cent.
Buyer and seller predictive stats
18%
Toronto area residents who indicated their plan to purchase a home in the next two years — up from 15% last year. That compares to 14% of Ontarians who stated their likelihood of buying in the next two years — a seven index point increase from this time in 2015.
19%
Toronto area respondents who plan to sell a home in the next two years, up from 14% last year.
82%
Proven prospective homebuyers in Ontario who believe in the strength of their local economy. 76% of those likely to sell their homes say the same.
45%
First-time buyers in the Province who say it’s increasingly challenging to save for a 20% down payment to meet the government’s more rigorous mortgage requirements.
20%
First-time buyers who say they have no choice but to postpone their purchase because of the new lending rules.
34%
First-time buyers who are now looking for a less expensive home in the same city as an alternative.
Ipsos for the Ontario Real Estate Association Ontario Home Ownership Index
