The recent intervention by the Ontario government to cool the Toronto-area’s hot housing market is already having an impact on sellers and buyers plans for the year, according to a new poll.
At the end of April, Ont. Premier Kathleen Wynne introduced a 16-point Fair Housing Plan to tame the Greater Toronto Area’s expensive real estate market, including measures such as expanded rent control and a foreign buyers’ tax.
In order to gauge the immediate implications of the announcement, the Toronto Real Estate Board (TREB) commissioned Ipsos Public Affairs to conduct a consumer survey. The results of the poll conducted from May 23 to May 29 were released on Friday.
According to the findings, 30 per cent of households in the GTA responded that they’ll “likely” list their home in the next year. Wynne’s Fair Housing Plan was specified as the primary reason for selling by 15 per cent of respondents.
The survey also found that homeowners planning to list their properties aren’t exiting the housing market altogether; instead, 80 per cent of them said they would be purchasing another home in the next 12 months.
Jason Mercer, Director of Market Analysis for TREB, said in a news release that the survey results suggest that respondents are more interested in “changing the type or location of home they will own” than leaving the GTA entirely.
Earlier this month, TREB reported that active listings in the GTA surged 42.9 per cent from a year ago and sales plunged 20.3 per cent in May compared to the same time last year.
Although the average selling price for all properties for the month of May was $863,910, up from $752,100 last year, it was still down from $919,614 in April, according to the real estate board.
The data suggests the Ontario government’s involvement in the market was already having an effect in the first full month since the measures were announced.
Home buyers
The TREB poll also found there were less first-time homebuyers looking to buy in May than there were last fall when they conducted a similar survey. The real estate board reported that 40 per cent of likely buyers indicated they would be first-time buyers as opposed to 53 per cent in the fall findings.
“It makes sense that some first-time buyers have decided to, at least temporarily, put their decision to purchase a home on hold,” Mercer said. “First-time buyers are more flexible, and can take a wait and see approach. They could also re-enter the market quickly once they make the decision to purchase.”
The real estate board’s president, Larry Cerqua, noted that, despite the dip in sales and increase in listings over the past two months, there are still many people thinking about buying a home this year.
“This could reflect the fact that new policies, like those contained in the Ontario Fair Housing Plan, can have an initial psychological impact before long-term impacts become clear,” Cerqua said.
Conducted through Ipsos online I-Say panel, the survey comprises 3,407 Ontario residents with 416 and 905 area codes, aged 18 and over. The results are considered accurate to within +/- 3.0 percentage points.
