JANUARY 31, 2017 – The Toronto Real Estate Board will release
its annual Market Year in Review & Outlook Report today at its Economic Summit being held at
Toronto’s Parkview Manor.
The report provides a look forward into the 2017 housing market and tackles top-of-mind issues,
including consumer intentions, foreign buying activity in the Greater Toronto Area, impact of
transportation infrastructure on housing affordability, and the lack of housing supply.
“This report will be extremely useful to anyone with an interest in the housing market in the
Greater Golden Horseshoe, including REALTORS® and their clients, housing industry stakeholders, and
all levels of government. One standout for me in the research
conducted by Ipsos was the continued importance of the REALTOR®. Over 80 per cent of likely buyers
are planning on engaging the services of a REALTOR® in their purchase this year. This shows the
value TREB Member REALTORS® add to the transaction. Home ownership is a great investment and TREB
Member REALTORS® are professionals who will expertly guide you through each step of the process,”
said TREB President Larry Cerqua.
TREB is forecasting another strong year for home sales through its MLS® System in
2017, with more than 100,000 sales forecast for the third consecutive year. Between
104,500 and 115,500 home sales are expected this year, with a point forecast of 110,000
– down slightly from 113,133 sales reported by GTA REALTORS® in 2016.
Ipsos, on behalf of TREB, undertook a home buyers survey in November 2016. The survey focused on
consumer buying intentions in 2017. Compared to a similar survey conducted at the end of 2015, the
number of likely buyers was down slightly. However, GTA households still seemed upbeat about
ownership housing. This included first-time buyers, whose share of overall buying intentions
increased to 53 per cent from 49 per cent a year earlier.
“While changes to federal mortgage lending guidelines and higher borrowing costs may impact some
would-be home buyers, the big impediment will be the lack of inventory. Active listings at the end
of December were at their lowest point since before the year
2000. It is unlikely that the shortage of listings will improve to any great degree over the
course of the next year. This will put a ceiling on sales growth,” said Jason Mercer, TREB’s
Director of Market Analysis.
As a result of very strong demand for ownership housing up against an extremely constrained supply
of listings in 2017, double-digit annual rates of price growth are expected to remain in place for
the majority of home types across the GTA. The growth rate for the average selling price will be
between 10 and 16 per cent with an average price range between $800,000 and $850,000. TREB’s point
forecast for the average selling
price is $825,000.
Low-rise home types, including detached and semi-detached houses and townhouses, will experience
the strongest annual rates of price growth, but the condominium apartment market segment will
remain tight as well.
The Ipsos home buyers survey confirmed that likely home buyers are expecting to see strong home
price increases in 2017. However, Ipsos also found that the average home buyer is planning on
making a substantial down payment – 27.6 per cent for all recent home buyers combined and 23.9 per
cent for first-time home buyers. The sources of home buyers’ down payments were also quite diverse,
including savings within and outside an RRSP, gifts from friends/family and equity built up in
their current dwelling.
Despite relatively large down payment percentages, home price growth has obviously been a concern
from an affordability perspective. The policy reaction to date has been focused on the demand side
of the price growth equation. Changes to federal mortgage lending guidelines and ruminations about
a foreign buyers tax for the GTA dominated the headlines in the second half of 2016.
A foreign buyer tax in the GTA would be misguided. In order to obtain actual empirical
data on foreign buying activity in the GTA, as opposed to conjecture, TREB commissioned Ipsos in
November 2016 to survey its Members, who acted on behalf of home buyers during the preceding 12
months, as to foreign buying activity in the region. Key findings were as follows:
• Only an estimated 4.9 per cent of GTA transactions, in which TREB Members acted on behalf of a
buyer, involved a foreign purchaser.
• The great majority of foreign buyers purchased a home as a primary residence (40%), to rent out
to tenants in an extremely tight GTA rental market (25%), or for another family member to live in
• Less than 2% of REALTORS® had been involved in a transaction for a foreign buyer which they knew
was impacted by the foreign buyer tax in British Columbia.
An additional land transfer tax on foreign buyers could have unintended consequences, including:
• Tighter market conditions and stronger price growth in neighboring communities/regions without a
• Less rental supply, because the number of investors looking to purchase and rent out a property
could decline; and
• A potential negative impact on immigration. It is important to remember that population growth
in the GTA, on net, is driven by immigration.
“Housing affordability, and affordable home ownership in particular, is a growing concern. Home
prices will increase well above the rate of inflation and income growth in 2017, as the supply of
listings remains very constrained. While governments have been focusing their policy solutions on
allaying demand, what is needed are policies that focus on the lack of available homes for sale and
for rent. The public, private, and not-for-profit sectors need to come together to focus on
innovative solutions to the housing supply issue,” said TREB CEO John DiMichele.
In addition to analyzing market fundamentals influencing demand, supply, price growth, and,
ultimately, affordability, TREB had Canadian Centre for Economic Analysis undertake a study on how
improved transit infrastructure, and particularly the Metrolinx Regional Express Rail plan, can
impact housing affordability. The study found that the impact of
RER on affordability is largely positive in the regions making up the GTA and surrounding GGH,
especially when residents take advantage of the new transportation infrastructure and switch their
mode of commuting. Improved transit infrastructure can also add price premiums of up to 12 per cent
to a home’s value. The findings of CANCEA’s study are summarized in the report.