Toronto and Vancouver are two of Canada’s most populated cities and have, by far, been the biggest newsmakers where real estate is concerned. Both have seen real estate markets skyrocket in recent years. While there are some similarities between these two Canadian real estate markets, there are also some important differences and the two could potentially be headed in completely different directions as far as the future is concerned.
Vancouver has made news because of the sheer volume of foreign investment whereas Toronto’s market is fueled by constant supply and demand shortages. For these reasons, many have speculated that these two markets are expected to move in different directions.
In 2016 it was widely reported that the B.C. government would look at a new tax on non-residents looking to purchase in the province. This was later implemented in Vancouver and other municipalities are now discussing following suit.
Since this tax on foreign buyers was implemented there have been reports that the market is beginning to correct itself. BMO Nesbitt Burns released research in Jan 2017 speaking to the cooldown – you can read a full article on the topic here: http://www.ctvnews.ca/business/b-c-s-foreign-buyer-tax-is-actually-lowering-vancouver-housing-prices-bmo-1.3257966.
Meanwhile, in comparison, Toronto’s real estate market continues to skyrocket as demand for Toronto real-estate continues to climb. Here are some 2016 trends that were recently published in the Huffington Post: http://www.huffingtonpost.ca/2016/11/15/vancouver-housing-toronto-crea_n_12988116.html.
In January, Royal LePage estimated that the median residential price in the GTA will jump 10% this year while Greater Vancouver will experience an 8.5% price decrease for various housing types. Read more here: http://www.theglobeandmail.com/real-estate/greater-toronto-area-faces-looming-jump-in-housing-prices-royal-lepage/article33589023/.
Changes in the housing market are important developments that lenders must stay on top of. While the big banks have economists that follow these developments closely, other lenders such as credit unions, trust companies, MICs and other financial institutions must stay in the know both to keep competitive and to manage risk.
How can you do this? Subscribe to a news feed that deals with changes in the housing market. We routinely share data about changes to the housing market on Twitter @purview4lenders
Follow notational house price indices like the Teranet–National Bank National Composite House Price Index™. You can follow at https://twitter.com/hp_index or subscribe to monthly publications at www.housepriceindex.ca. Also subscribe to technology that enables you to monitor changes in the housing markets through automated valuation reports.
It will be interesting to see what 2017 has in store for these two major housing markets. With at least one Toronto City Councillor raising discussion about implementing a similar tax concerning foreign buyers, it’s really anyone’s guess.