Harvey Kalles Real Estate Market Report and Listings Sold and Leased: November 17 to November 30, 2012

Posted by: Elise Stern, Created date: December 12, 2012
As part of a real estate brokerage based in Toronto, we are very interested to see what will happen – and we’re especially interested in how Ford’s firing, or his successful appeal, might affect the way real estate is bought, sold and developed in the city. We’ve put together our own analysis of how Ford’s presence or absence might affect the Toronto Land Transfer Tax and council’s use of Section 37.
Meanwhile, the Toronto Real Estate Board has released its end-of-month sales figures for November, with more of the same pattern that we’ve seen since the summer. Transactions are down in the double-digits and prices are up… but this month, prices are up a little less than what we’ve been seeing. The MLS® Home Price Index (MLS® HPI) Composite Benchmark, which takes into account several variables and is more accurate than a simple average, shows a year-over-year price increase of 4.6%: this isn’t bad, but it’s a little weaker than the past few months.
There are a few reasons for this. Ann Hannah, the president of TREB, blames the Land Transfer Tax and the new mortgage rules: “Stricter mortgage lending guidelines, including a reduced maximum amortization period and a purchase price ceiling of one-million dollars for government insured mortgages, have prompted some buyers to move to the sidelines.  This situation has been exacerbated in the City of Toronto because the additional upfront Land Transfer Tax takes money away from buyers that otherwise could be used for a larger down payment,” she said.
Regardless of the reason, though, it’s clear to us here at the brokerage that we may be moving into a more balanced market.
So what do we mean by that?
In the past few years, we’ve seen a Toronto real estate market that’s been tilted heavily towards sellers. Prices have been rising dramatically, particularly in the most desirable areas, and competition for homes is fierce. A “balanced market”, in real estate terms, suggests a market that is tilted in favour of neither buyer nor seller. There is neither an undersupply nor an oversupply of homes. Prices rise year-over-year, but on a gentler curve than the red-hot market we’ve been in.
A balanced market – if indeed that’s what we’re seeing here – is not a “cool” market, and it is not an oversupplied market. Rather, it is a calmer, but more sustainable, market that is likely to be of benefit to everyone in the long term.

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