Corinne McCabe , Broker

More than two-thirds of Toronto condo investors are planning to sell their properties rather than pay the new vacant home tax, according to a new Toronto Regional Real Estate Board (TRREB) report. Toronto City Council voted to create an implementation plan for a vacant homes tax in the city which would take effect sometime in 2022. The tax would encourage owners to sell or rent out their vacant properties, which would increase housing supply, the City of Toronto said in a news release. Those who do not would need to pay the tax, and proceeds would go toward building new housing supply.

A total of 40 % of those polled at the end of last year said that they intend to sell their investment property in the next year in part due to a prospective vacancy tax, as well as further restrictions on Airbnbs. TRREB has been up front in asking the City to be prudent with its implementation of the tax, calling for exemptions for snowbirds, U.S. citizens, commuters, and other groups.

Using data from Vancouver’s implementation of a vacant home tax as an example, if one per cent of Toronto’s housing stock is vacant, at a tax rate of one per cent on the average Toronto home’s current assessed value, this could equal $55 million to $66 million in tax revenue per year. Toronto’s tax rate will be determined in the tax development process. Determining how a home is deemed vacant will be part of the tax development process, but residential property owners would be required to make a declaration each year about the occupancy status of the home.

On another subject, TRREB is applauding Toronto City Council for listening to the concerns we expressed and has decided to NOT implement an increase to the Municipal Land Transfer Tax on homes priced over $2 million. Had it been approved the portion of the property value over $2 million would have been subject to a 3.5% land transfer tax rate, up from 2.5% - a 40% increase.

This week the Toronto Regional Real Estate Board (TRREB) released its annual Market Year in Review & Outlook Report for 2021, projecting optimism for a booming Greater Toronto Area (GTA) real estate market in 2021. The report forecasts near-record sales numbers of 100,000 units, with average selling prices expected to break records and exceed the $1 million mark.

The blazing start to the year comes from a strong finish in 2020. January recorded 6,928 sales which represents an over 50% increase measured year-over-year against January 2020. Sales growth was recorded in all market segments, including condominiums in both the 416 and surrounding 905 regions. New listings also increased year-over-year, though at a less pronounced rate, which led to a tightening of market conditions versus the previous January.

The average selling price for January 2021 spiked 15.5% year-over-year to $967,885, driven primarily by the low-rise market segments as condominium apartment prices dropped in Toronto during this period. Despite this, TRREB expects that the continued growth of condominium sales could soon lead to sales growth outpacing listing growth, and renewed condo price appreciation.

Is the real estate market picking up steam at an uncomfortable pace? One just has to look at the number of multiple offers and wild bidding wars to know that demand is at an all time high. Hopefully as we start moving into the spring market lets hope listings become more plentiful, especially after this long weekend and the kids are back at school. Let us take this weekend to be with family and see what next weeks brings us. Happy Family Day!

The Toronto region had its fourth consecutive month of record sales volumes in October with 10,563 homes sold, up 25% from October 2019 and the Toronto Real Estate Board is forecasting record or near-record sales to continue through the balance of the year. The average sale price for the GTA was up 13.7% to $968,318 and for the City of Toronto it was up 10.8% to $1,025,925. Detached homes led the way, with sales up 33.9% and an average sale price of $1,204,844, an increase of 14.8%.

New listings for all categories of homes rose to 17,802 across the GTA, up 36% from October 2019. Condo listings more than doubled to 6,193, compared to October 2019. Sales of condominium apartments fell 8.5% in the City of Toronto compared to the same month in 2019, with prices up just .8% to $668,161. Active listings are up 158% in Toronto to 5,719 units. As the pandemic slowed economic development and halted tourism in the city, the short and long-term rental income many investors relied upon dried up. If you are looking to buy a condo it’s a buyer’s market now and you will benefit from more choice available.

The strongest gains across all re-sale housing categories occurred in the 905 communities outside Toronto, where buyers can often afford a little more space. Suburban areas that once lagged desirable city addresses are now roaring hot as home buyers wearied by lockdowns seek bigger yards and larger living spaces. Tight downtown condo markets that previously commanded expensive rents are now thick with supply. And the flow of immigrants that typically fuel demand for housing of all types has slowed to a trickle.