TREB’s Foreign Buyer, Speculation Figures Questioned

The Toronto Real Estate Board (TREB) reported on May 3 that the total number of transactions in April slipped 3.2 percent from a year ago.

Meanwhile, the average price for all properties in the Greater Toronto Area (GTA) in April rose by 24.5 percent year-over-year to $920,791. In March, prices skyrocketed by 33.2 percent.

Listings shot up 33.6 per cent from a year ago—the greatest year-over-year increase in at least seven years, TREB said.

Jason Mercer, TREB’s director of market analysis, said it is premature to say whether the influx of homeowners putting their properties up for sale is the result of soaring prices, which make it tempting to cash out, or of the province’s new measures.

“It’s too early to say whether it was just homebuyers reacting to the strong price growth that had been reported through the first quarter, or if there was some impact from the policy announcement,” Mercer said.

TREB also released fresh data indicating that speculation and foreign ownership make up a small component of the city’s housing market.

Between 2008 and April 2017, the average share of foreign buyers of properties in the Greater Golden Horseshoe region was 2.3 percent. TREB said its analysis was based on property assessments and land registry data in the province.

During the same time period, the share of homes that were bought and sold within one year of the original transaction—an indication of speculative activity—was also low, TREB said.

Less than 5 percent of transactions fit that definition last year, but that number rose to 7 percent in the first four months of this year, a trend that may indicate that rising prices have lured more speculators into the market.

Ontario Finance Minister Charles Sousa downplayed TREB’s statistics, suggesting he wanted to wait for more data to determine how much foreign buying is in the market.

“[TREB is] taking data from addresses on the transactions, but TD economists and others have suggested it may be higher,” Sousa said. “We do know that once Vancouver instituted a non-resident speculation tax, it immediately spiked up activity in the Toronto area.”