Two years ago, Ontario introduced the Fair Housing Plan, 16 measures designed to cool the housing market, which appeared to be on fire at the time. Prices were skyrocketing with no end in sight and buyers were facing outrageous bidding wars and enormous pressure to jump into the market. So, the province stepped in and added a foreign buyers tax for non-residents, rent control for all buildings and a variety of other recommendations. That was in April 2017.
Immediately after, the market went haywire. Sellers and buyers were uncertain about what to do. Prices stabilized and transactions slowed. Adding to the confusion, the federal bank regulator instituted a mortgage stress-test shortly after in 2018, requiring borrowers to qualify at a rate at least 2 per cent higher than their contract rate.
But Zoocasa, an online real estate brokerage, wanted to understand how markets and prices have changed since the introduction of the FHP two years ago.
They sourced sold home prices and sales-to-new-listings ratios (SNLR) from various local boards across the province for April 2019 and compared it to 2017 data from the same month. The SNLR is calculated by dividing the number of sales by new listings over the month; a ratio between 40 – 60% is defined as balanced by the Canadian Real Estate Association, with below and above that range indicating buyers’ and sellers’ markets, respectively.
They found that the York Region was hardest hit by the FHP.
Newmarket and Aurora home prices plunged 30 per cent in two years. Richmond Hill and Markham home prices dropped 27 and 24 per cent respectively. You can now get a detached home for under $1 million in these areas.
The eastern suburbs of Toronto also fared poorly, with Pickering, Oshawa, Whitby and Ajax prices all diving between 12 and 18 per cent. Homes are now available in the $500-$650,000 range.
But some regions actually did better in the last few years. These were usually areas that are a bit further commute from Toronto and had lower-priced homes to begin with. It’s likely that buyers with reduced affordability are spilling out of the GTA and into smaller hubs where they can get more house for less. The increase in demand has likely lead to tighter market conditions and higher prices.
Barrie is one of those cities. Homes on the Barrie MLS climbed 7 per cent to $563,530. Kitchener real estate reacted similarly and rose 5 per cent to just over $500,000. Guelph homes for sale also edged slightly upwards 1 per cent to $544,000.
But Windsor-Essex real estate takes the award for the city that actually thrived post-FHP. There, real estate prices rose a full 25 per cent to $344,000.
Check out the infographic below for a full ranking of Ontario cities.
Zoocasa.com is a leading real estate company that combines online search tools and a full-service brokerage to empower Canadians to buy or sell their homes faster, easier and more successfully. Home buyers can browse real estate listings on the website or the free iOS app.