TREB blames government intervention
January 18, 2018
It was not resistance to higher home prices but government intervention that cooled the Greater Toronto housing market in late 2017, according to the Toronto Real Estate Board (TREB).
Housing sales in the GTA reached 92,394 units in 2017, down 18.3 per cent from a year earlier.
Record sales in the first three months of last year (Q1) were followed by a decline in Q2 and Q3 after the Ontario Fair Housing Plan (FHP) was announced. The pace of sales picked up in Q4, as some buyers arguably “bought forward” in response to the new mortgage stress test guidelines that came in to effect January 1, 2018, TREB explained.
“Much of the sales volatility in 2017 was brought about by government policy decisions,” said TREB president Tim Syrianos.
He said the Ontario Fair Housing Plan, which included a foreign-home buyer tax had a negative “psychological impact” on the market.
“Looking forward, government policy could continue to influence consumer behaviour in 2018, as changes to federal mortgage lending guidelines come into effect,” Syrianos added.
The average composite home selling price for 2017 in the GTA was $822,681, up 12.7 per cent from a year earlier.