In a recent trend of sorts, home prices in case of detached homes in the biggest housing market in Canada, Toronto, are going down. Average selling prices of detached homes in Toronto are going below the $1 million threshold, which is expected to attract several investors and buyers along with ensuring higher access to quality housing. Mid-month figures encompass sales volumes spread over the first two weeks in August, 2017 and these indicate that $974, 212 is the average selling price for a detached home location in the Greater Toronto Area. This represents an increase of 0.8%.
However, this is a decline in comparison to the average price of $1,000,336 which was observed by the end of July, 2017. The threshold of $1 million is important on account of changes that were set in motion in the year 2014 with the Government supported mortgages for housing units selling for prices in excess of 7 figures in this category. This move was majorly aimed at the Vancouver and Toronto real estate markets. According to experts, there should be more changes for bringing more customers into the market. The average selling price of a house in Toronto stood at $1,200,313 for the first 2 weeks this month. This indicates a rise in comparison to last year of 3.8% and this is quite above the threshold for availing of mortgage insurance in Canada.
Experts highlight some other factors like the generation of baby boomers not shifting into their retirement homes until they are in their 80s and also the fact that policy reversal cannot be expected since prices of homes in Toronto keep nearing a bear-market like situation. Anyone with lower than 20% of down payment should have mortgage insurance which secures banks in case of any defaults but customers can buy these homes with only 5% down payment for the first sum of $500,000 and 10% on the remainder above this threshold up to $1 million. Prices of homes have gone up over the last year in Toronto and hit their peak in April.
This came after the Government in Ontario launched measures like a 15% tax imposed on foreign homebuyers in the Greater Golden Horseshoe where close to 9 million people stay in southern Ontario. Detached home prices have been going up over the last few years though they are 20% off the peak in recent times which explains this recent drop. However, whether this manages to attract customers is something to be carefully observed in the near future.
