Southern Ontario housing markets continued to grow in the two years after the Fair Housing Plan (FHP) was introduced by the former Liberal provincial government, reports Zoocasa.

This online brokerage recently analyzed MLS data in order to analyze on how every major housing market in Ontario has fared since the FHP was announced in April 2017.

What happened?

The FHP introduced 16 measures designed to chill the market, including rent controls and a foreign buyer tax. Its real effect was psychological, however, as both buyers and sellers were operating under a cloud of uncertainty. Prices and sales immediately cooled. But that was two years ago — what’s the story now?

Zoocasa found that markets in southern Ontario, in contrast to the York Region and the eastern suburbs, remained largely unscathed, having posted steady gains since then.

Cause of market increase

The success of this region is likely due to the fact that properties are still fairly affordable, and the job landscape is strong. Windsor homes shot up a full 25 per cent in price to $344,000 while London homes climbed 19 per cent to $430,000. Buyers priced out of Toronto are likely to have contributed to levels of high demand in this city.

Smaller cities also doing well

Other smaller, more affordable cities also did well.

Barrie homes for sale shot up 7 per cent to $563,530 and Kitchener real estate rose 5 per cent to just over $500,000.

York Region, eastern, western Ontario, not doing so well

Meanwhile, York Region, which is mostly full of expensive single-family homes, got hit the hardest. Prices fell upwards of -30 per cent and activity stalled.

Similarly, western cities along Lake Ontario proved to not be as resilient. Expensive Oakville sank 18 per cent, neighbouring Burlington by 4 per cent and Brampton by 6 per cent.

The eastern suburbs, for reasons that are unclear, considering that they too are also affordable, also plunged in price. That includes Oshawa down 17 per cent, Whitby, down 15 per cent and Ajax down 12 per cent.

Looking forward, it’s too early to say what the FHP holds for the future. The government is now Conservative and they’ve already rolled back rent controls and created a new housing guide, called Housing Supply Action Plan.

Ontario housing market infographic

Check out the infographic below for a full ranking of Ontario cities.

By Zoocasa

Zoocasa.com is a leading real estate company that combines online search tools and a full-service brokerage to empower Canadians to buy or sell their homes faster, easier and more successfully. Home buyers can browse real estate listings on the website or the free iOS app.

According to CREA, the national number of sales rose 3.9 per cent month over month, and 2.6 per cent from November 2016 – the fourth month in a row to see gains, but the first time since March that activity has been stronger than last year’s levels.

This is mainly due to the downturn witnessed in the Toronto real estate market and throughout the Greater Golden Horseshoe following the implementation of the Ontario Fair Housing Plan in April. However, it was a slight recovery in these markets that has fueled national November growth, with an increase of 16 per cent in Greater Toronto accounting for two thirds of all sales.

The MLS Home Price Index rose 9.3 per cent from 2016, while the average sale price increased 2.9 per cent to $504,000. Excluding Toronto and Vancouver would strip out over $120,000, to $381,000.

Stronger Sales Will Be Temporary

However, Canadians shouldn’t get used to this uptick in sales activity, as much of it may be due to buyers rushing into the market to get ahead of the Guideline B-20 rules that will take effect on January 1st. Experts say these rules, which will stress test all new mortgage applicants, will reduce affordability for the average buyer by 20 per cent.

CREA President Andrew Peck believes this has led to temporary buyer urgency during what is usually a seasonally slower time for real estate, as buyers snap up Toronto townhouses, condos and detached homes before seeing their affordability slashed.

“Some home buyers with more than twenty per cent down payment may be fast-tracking their purchase decision in order to beat the tougher mortgage qualifications test coming into effect next year,” stated CREA President Andrew Peck. “Evidence of this is mixed and depends on the housing market. It will be interesting to see whether December sales show further signs of home purchases being fast-tracked.”

Stated Chief Economist Gregory Klump, “National sales momentum remains positive heading toward year-end. It remains to be seen whether stronger momentum now will mean weaker activity early next year once new mortgage regulations take effect beginning on New Year’s Day.”

INFOGRAPHIC: Toronto and Vancouver Lead Pre-B20 Rush

This buyer anxiety appears to be concentrated in Canada’s largest markets – in an INFOGRAPHIC compiled by Zoocasa, it’s clear other major centres are experiencing steady activity throughout the autumn season, compared to strong upticks in the Toronto and Vancouver markets.

[INFOGRAPHIC]  from Zoocasa.com 

By: Penelope Graham, Zoocasa

Penelope Graham is the Managing Editor of Zoocasa.com, a leading real estate resource that uses full brokerage service and online tools to empower Canadians to buy or sell their home faster, easier, and more successfully.

That’s a considerable chill, even for the typically cooler July market says Lauren Haw, Broker of Record at Zoocasa Realty.  “The typical month-over-month decline from June to July is 15 per cent, this year we saw a 30 per cent decline in the same period, indicating an increased velocity in the slowdown,” she says.

The sale downturn effectively yanked on prices too – the average price for all combined home types was $746,218 last month- a 6 per-cent decline from June, though 5 per cent higher year over year. All home segments were impacted, from detached homes sales (with sales down 29.4 per cent month over month and prices down 5.25 per cent to an average of $1,000,336), to Toronto condos (sales dropped 22.3 per cent, and prices 3.46 per cent, to an average of $501,750), to Toronto townhouses (down 29.5 per cent, with sale down 1,84 per cent to $541,144).

However, those numbers look at the GTA in aggregate – some markets are certainly weathering the downward trend better than others. For those looking at renting vs buying, here is an INFOGRAPHIC from leading Canadian rental website RentSeeker.ca showing Canada’s least and most expensive cities to rent an apartment.

To illustrate how various regions are faring, real estate resource Zoocasa has compiled the data into a heat map, indicating the differences in sales and price growth (or lack thereof) per region. Check it out below:

By: Penelope Graham, Zoocasa

Penelope Graham is the Managing Editor of Zoocasa.com, a leading real estate resource that uses full brokerage service and online tools to empower Canadians to buy or sell their home faster, easier, and more successfully.

However, home prices have heated substantially more in some markets than others; while prices rose in 70% of all markets, reports CREA, much of reported price growth is being driven by activity in the Greater Toronto Area.

“Housing market trends continue to differ by region. Homes are selling briskly throughout the Greater Toronto Area and nearby communities,” stated CREA President Cliff Iverson. ‘Elsewhere, competition among local buyers is less intense, so listings take longer to sell.”

Regardless of what province and city though, it’s safe to say that real estate has been a robustly performing investment, as buyers who entered the market even just 12 months ago have seen impressive gains on their initial down payments.

Just how much have those real estate investments paid off? To find out, Zoocasa compiled the latest February CREA data to see how home prices have appreciated over the last year,

Toronto: A Runaway on Returns

Toronto real estate prices have had a banner year, and those who have already purchased in the Big Smoke have lots to cheer about. They’ve received the largest return on their down payments by far – a whopping 139%, based on a 20% down payment of $137,056 made on the average home price of $685,278 last year. These price rises have spilled into the surrounding region with “unprecedented growth” reported in the Golden Horseshoe, as housing markets in Hamilton, London and Kitchener-Waterloo heat up.

Rents in Toronto according to RentSeeker.ca’s new real-time pricing data of apartment listings across the country, showed One Bedroom Apartments in Toronto renting for $1,255, with Two Bedroom Apartment Rentals in Toronto renting for $1,496, and Three Bedroom Apartments for Rent in Toronto renting for $1,651.

Vancouver: A Slide in Prices

The numbers for the west coast city may seem alarming, as prices have seen a considerable tumble from last year’s peaks. A down payment purchase of $207,827 made on the average home price of $1,104,188 saw a -49% dip, as Vancouver prices fall below the million-mark.

However, Lauren Haw, CEO and Broker of Record at Zoocasa, emphasizes there’s no need for Vanouverite home buyers to panic. “It is important for real estate investments to be considered over the long-term. The nature of real estate as a levered investment means that year over year fluctuations serve to magnify short term returns or losses,” she says. “When the burden and potential risk of debt is properly accounted for, the ability to lever your down payment can lead to impressive equity returns.”

Calgary: A Slight Uptick

Despite several years of economic hardship resulting from slowing oil prices, Calgary’s housing market has new reason for optimism, with prices strengthening $11,659 year over year. That means a buyer who paid $90,635 on a home priced at the average $453,175, is seeing a 13% return this year.

Calgary rents according to RentSeeker.ca, showed 1 Bedroom Apartments in Calgary renting for $1,031, with 2 Bedroom Apartments in Calgary renting for $1200, and 3 Bedroom Apartments for Rent in Calgary renting for $1,471.

 Halifax: Stronger Conditions on the East Coast

Meanwhile, in the Maritimes, last year’s home buyers are experiencing a 19% average return based on a $10,444 improvement in the city’s home prices, now priced at $279,362.

Follow Zoocasa and RentSeeker.ca on Twitter and Facebook and join the conversation on Canada’s Housing and Rental Markets!

Given the average house price now tops $1.3 million in the city, according to the Toronto Real Estate Board, you better have a significant nest egg if you dream of detached living. The next best option is to find a great neighbourhood with affordable townhomes.

Average Toronto Income Comes Up Short

When it comes to homebuyer affordability, the numbers can be daunting. Let’s say a borrower earns the median Toronto household income of $76,219, pays at least 20% down on their home purchase, and qualifies for a 2% variable-rate mortgage with a 30-year amortization.

Even in this best-case scenario, they’d still only be granted $636,886 in affordability by their lender. That amounts to precious little in a market where bidding wars are the norm and homes increasingly sell for hundreds of thousands of dollars over asking.

Searching Beyond City Borders

Many buyers who find themselves priced out of the market “drive until they qualify”; they’ll buy a house in a further-flung GTA community – TREB reports the average home can be found there for $795,569 – and brace for a daily car or train commute.

But suburban life isn’t for everyone. And, while raising a family in a high-rise is becoming a more common tactic (developers are even creating larger units to meet demand), it’s not an ideal situation for all.

Townhomes: The New Toronto Real Estate Reality

For buyers who wish to remain in the city but need more space, townhomes are quickly becoming the new low-rise standard. According to MLS townhouse and detached house sold numbers compiled by Zoocasa, the average detached home price skyrocketed a whopping 83.% from 2011 to 2016. By comparison, townhome prices surged only 53.3%, to an average of $562,187 – still within the realm of affordability for many Toronto buyers.

To help homebuyers on their home search, Zoocasa has identified the top 20 most affordable neighbourhoods for Toronto townhomes, along with the change in demand, and average time on the market.

Check out the infographic below to find a townhouse option in your price range

By: Penelope Graham, Zoocasa

Penelope Graham is the Managing Editor of Zoocasa.com, a leading real estate resource that uses full brokerage service and online tools to empower Canadians to buy or sell their home faster, easier, and more successfully.