If you have any sort of stake in the Toronto real estate market, you know the recent changes to the tax code have had a significant impact on the market this year. While the federal government has laid plans to incorporate more rigorous stress tests for potential buyers, it has also had an immediate impact on housing prices and the way in which potential buyers can be approved for a traditional mortgage.
Whether you are new to investments in the real estate market, such as a first-time homebuyer, or you have been buying and selling properties for some years, there are some specific details that may be important for your consideration as the real estate market rises and falls over the course of the next several months.
- While detached homes in the GTA have seen sharp price declines after the implementation of the new tax law, condo sales remain fairly stable.
- The government regulations are intended to cool the Toronto real estate market as demand exceeds supply, and foreign buyers were leading the trend for home purchases.
- Ontario’s Fair Housing Plan includes a 15% tax on non-resident purchases of homes, a regulation implemented in April 2017, which is still being monitored for impact.
- Banks are now required to “stress test” borrowers prior to providing conventional mortgages to ensure they can afford an increase in mortgage rates.
Last month, The Canadian Real Estate Association forecast that home prices in Ontario will fall by a projected 2.2% in 2018 due to the recent changes in regulations. While the market remains somewhat volatile, there are also expectations that it will stabilize again once potential buyers feel confident they can invest again. You can also find more recent trends on the Toronto Real Estate Board website.
At BlueRock Wealth Management, we can help you address any questions you may have about the new regulations and how they may affect your investment portfolio. Contact us today to discuss your options.