Not even a 16-point measure to cool the GTA housing market has been able to stop home prices from rising, a new report suggests.
The benchmark price of a home in the Greater Toronto Area was $821,400 in May, up 1.2 per cent from April and 28.9 per cent higher than it stood 12 months prior, according to the latest data from the Canadian Real Estate Association.
That’s considerably above the national benchmark price of $613,800, which represents an annual increase of 17.9 per cent.
The May resale numbers were highly anticipated because they detail the first full month of activity since the Ontario provincial government gave word of its Fair Housing Plan, which included a Vancouver-style foreign-homebuyer tax of 15 per cent, on April 20.
While GTA sales were down 25.3 per cent in May compared to April, BMO Senior Economist Sal Guatieri notes in commentary that the decline “merely returned sales to some semblance of normalcy after a manic winter.”
The BMO economist does not expect Toronto to enter a prolonged cooling period as a result “if Vancouver is any guide.”
The CREA stats for Greater Vancouver show a market that has bounced back from the relatively frosty period that followed the BC government’s August 2016 move to tax non-resident homebuyers. In Greater Vancouver, the benchmark home price was $967,500 in May, growing 2.8 per cent from April and 8.8 per cent over year-ago levels.
“Policy tinkering will do little to cool demand on a sustained basis,” notes Guatieri. He also draws attention to the fact that “most areas in the [Greater Golden Horseshoe] still have less than a two-month supply of available homes on the market.” “As a result, while price growth has simmered down from the overheated pace of earlier this year, it remains positive.”
National Bank Senior Economist Marc Pinsonneault was another notable observer to highlight the continued strength of GTA home price gains in a post-foreign buyer tax environment.“[The foreign-buyer tax] had a dampening effect on sales and induced a rush to put homes on sale, but its effect on home prices remain[s] to be seen,” he wrote in a recent report.
His statement was included with the May results of the Teranet-National Bank House Price Index, which suggested GTA home prices rose 3.6 per cent from April to May and 28.7 per cent on a year-over-year basis.
The index, which dates back to 2006, has never recorded a larger month-over-month increase in GTA home prices before.