» location, location, location
Q A
BY ALAN
SERRECCHIA
SOLD
2-STOREY
DETACHED
Private Cul-De-Sac
CUSTOM BUILT
IN RICHMOND HILL
+ 4 Bathrooms
+ 4 Bedrooms
3,500-4,000 sq. ft.
» How strong was the 2016 real-estate market? The strongest ever to be exact. As we enter
the final days of 2016, we reflect on what will go down as the best year on record for residential real-estate in the GTA and the year that lies ahead.
Average home prices rose by 19-24% across the board in the 416 and 905 areas for all low
rise and nearly 10% for high rise. Will 2017 usher in more of the same upward trend? The
reality is, that this powerful growth has caught the attention of the federal government, which
has begun to enact measures aimed at cooling the market in the name of protecting the long
term financial security of Canadians. They have increased the minimum down payment
required on homes priced over $500,000; as of October 17th, 2016 they have legislated a
so called “stress test” on new buyers to ensure that lenders reject borrowers who cannot
withstand certain increases in interest rates; and finally, they are aiming to amend tax rules to
curtail foreign investor loopholes. All of these measures of course have the potential to affect
the market but the reality is, the number one factor pushing our market to unprecedented
heights is the demand for ownership and the short supply of listings – and this fact remains
unchanged going into 2017. The other thing to keep in mind, is that the “stress test” only
really impacts first time buyers, so all homeowners with existing insured mortgages or those
simply renewing mortgages, are not affected at all. As for any tax system changes, they are all
still only in the theoretical stages so their impact, whatever it may be, is not something at play
within this market as of yet.
Overall, it is with careful consideration of the above points that I feel confident heading
into 2017 that the upward trends we have all enjoyed in 2016 will continue for the most
part uninterrupted.
58
• fredi winter 2016
QUESTION
ANSWER
While it may seem like
some of the recent initatives
enacted by the government
are “penalties,” they are anything but. They are measures
created to ensure that you
do not end up on a financial
path that will ultimately
prove unsustainable. It is
really about protecting your
future self until you gather
enough experience in the
market that your choices will
be better guided by experience. Of course, it doesn’t
seem that way right now, but
your future self will thank
you as these mandates force
first time buyers to either
over-qualify or be patient
until their financial position
is stronger. This said, it is not
all bad. Over the years, the
government has put forward
a few measures to specifcally help first time buyers
– most notably, the Home
Buyers’ Plan which does provide a significant tax benefit
and a strong vehicle to start
your long term savings plan.
Most recently, Ontario also
agreed to refund first time
home buyers up to $4,000
from the land transfer tax –
this is set to take effect as of
January 1, 2017. While such
countermeasures may not
be enough to fully offset all
of the challenges confronting first time buyers, they
at least show that attempts to
strike a balance are under way.
HOUSE&HOME //