The Fair Housing Plan and B-20 have conspired to put downward pressure on valuations throughout Toronto, however, some neighbourhoods have been impervious.
The six steepest year-over-year drops between July 2017 and this year are Don Mills, Parkwoods-Donalda and Victoria Village, where prices depreciated 19%. Bridle Path-Sunnybrook-York Mills and St. Andrew-Windfields saw an 18% decline, as did L’Amoreaux, Steeeles, and Tam O’Shanter-Sullivan.
Newtonbrook East and Willdowdale East saw 17% drops, and Bayview Village, Bayview Woods-Steeles, Don Valley Village, Henry Farm, Hillcrest Village and Pleasant View depreciated 13%, as have Bathurst Manor and Clanton Park.
“January is when it started dropping and now it’s coming to the point where it’s stabilizing,” said Freda Lau, Fivewalls Realty’s director of operations. “We don’t see any reason for prices to go up really fast simply because with the users who come through, their budgets are getting tighter. It’s taking a while for the impact of some of these rules to come in place.”
Fivewalls compiled the data and also notes there were areas that appreciated despite the government’s intervention. High Park-Swansea, Roncesvalles and South Parkdale in Toronto’s West End saw 15% appreciations, while Cabbagetown-South, St. James Town, Church-Yonge Corridor, Moss Park, North St. James Town, Regent Park, and the Waterfrotn Communities had 12% hikes. Alderwood, Long Branch, Mimico and New Toronto bore witness to 10% appreciations.
The reason for appreciation in those neighbourhoods, says Lau, is they have a high number of condo sales. She also cautions that those price increases will eventually stabilize.
“We’re noticing that it’s especially the first-timers, whether in their early 30s and looking for first home or moving in with their significant other, they’re looking for condos and townhomes because detached homes are unaffordable for them, and an interesting stat we’ve seen is the number of inquiries for detached homes have decreased 10-15% this year compared to last year.”
Prices in the luxury market likely won’t rebound because demand has significantly tapered.
“I don’t see appreciation going back up in the luxury market because with the mortgage rules and Fair Housing Plan, the psychology of prices going up has pretty much stopped, and it’s very hard for luxury market to rebound in the $2mln-plus homes,” said Lau. “We’re seeing that it’s almost like getting a discount when you see a price depreciation of 18% in those neighbourhoods, whereas with condos and townhomes for first-timers, where those are the product that’s most available to them, those will keep going up a bit, but with the increase in interest rates that looks like it’s stabilizing because there’s only so much people can afford.”
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