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February 28, 2018

Ugly Year Over Year Prices Changes Across the GTA

Believe it or not, the housing market in the Greater Toronto Area - incidentally, one of the biggest housing bubbles in the world - has been quietly softening. Some regions have been hit with price declines of up to 30% over the past year.

Of course, this doesn't factor in the interim market peak that occurred in April of 2017. If trends continue, year-over-year data will look downright ugly come spring.

These kinds of declines have the potential to screw anyone who bought within the past couple years, as whatever equity they scrounged together evaporates. Throw in a 1 or 2 year term on a mortgage with new tighter mortgage qualification rules and the banks may be asking these buyers for additional down payment upon renewal.

How would you come up with an unexpected $150k? The only answer for many of these folks will be to sell - potentially with outstanding mortgage debt remaining. The more fiscally optimistic will find a way to bridge the distance with an unsecured loan at a rate somewhere around 6-9%.

I'd say neither option is good for the individual, the housing market or the economy.

For the data-inclined, the year-over-year (at Feb 2018) price changes across the GTA are listed below (source: Zolo):

CityPrice Growth
#1Caledon6.9%
#2Orangeville3.1%
#3Mono1.1%
#4Halton Hills-1.6%
#5Toronto-3.0%
#6Brampton-6.2%
#7New Tecumseth-7.4%
#8Ajax-8.0%
#9Mississauga-8.0%
#10Pickering-11.4%
#11Milton-11.7%
#12Oakville-14.7%
#13Vaughan-19.3%
#14Georgina-21.2%
#15Bradford West Gwillimbury-21.7%
#16Whitchurch-Stouffville-22.8%
#17Markham-24.3%
#18East Gwillimbury-25.0%
#19Uxbridge-28.5%
#20Newmarket-28.6%
#21Aurora-28.6%
#22Richmond Hill-29.2%
#23King-30.2%

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