Raise friggin interest rates already. An even better start.
The Toronto market is nuts. You have over-sized shacks going for $750,000+. Insane.
Government absolutely needs to intervene Mordko, I think anything that takes some demand / run-up out is a great thing. Vancouver needs more as well.
Even if the 5% figure is accurate for "foreign buyers", my understanding is that this does not account for a huge swathe of foreign money that is being deployed by those that are not characterized as foreign buyers (permanent residents, landed immigrants, students, family etc.). Also, a tax or speculation regarding an upcoming tax adds a layer of uncertainty that could keep people on the sidelines.
I'm looking at the market in Toronto, seeing the crazy run-up in prices, and getting a sense that the political will to actually do something is finally gaining momentum. I'm a seller now, and the specter of a tax definitely plays a part. I would much rather lock in $400-500k and give up another potential $500k of upside than see my $500k paper gain drop to $250k or $0 because I waited too long to sell.
While it's impossible to time the market perfectly, I just don't see how much longer this thing can go. It was "bubbly" 5 years ago when I bought, now it looks downright scary.
But wait until I sell!!!
At this point it's really an issue of closing the barn door after the horse has left, crossed the field, grown old and died.
Without a sizable crash, a single family home of any kind (outside of the odd townhome) is now out of reach of 95% of Toronto residents.
I have a few friends, couples in their mid to late 20s, with household income >$200k, who can't get into the market at these prices.
These are top 5-10% of income earners on a municipal/national scale, and probably top 0.5-1% for their age group.
Also, a number of colleagues are in a similar position. Income well in excess of $100k, and completely priced out of the market with the exception of condos.
Remarkably, this has less to do with prices, and more to do with regulatory changes. The monthly cost is not the hurdle. Without a downpayment of more than $200k (plus another ~$50k for closing costs), $1m+ houses are unattainable. And given that tear-down semis are now going for more than $1m, that really puts a damper on people's ability to buy.
Well, I sold in the GTA. And the house closed within the last 3 months. And it was about =$2M. And bought by a student. A Chinese student, who is - of course - a resident. And all but 1 viewings out of 30 were by Chinese buyers.
Worked out grrreat but something tells me there is a problem with this kind of market.
I absolutely live in the wrong city. $2M house sale mordko? Geez.
Almost, but the fact that a 20-year-old girl bought our family home is kinda of an insult.
Perhaps she is a wiz-kid and had a really good summer job. Except that she is supposed to be a student at a university which is 2 hour's drive away so... Again, I am thinking something is not entirely kosher here.
Think she wants to buy mine?
Always good to have a backup home just in case...