In toronto real estate, while the Toronto condominium market will certainly feel the dampening effects of the recent changes to federal rules governing mortgages, a renowned builder and real estate broker was contended that such adjustments will not inevitably lead to price corrections and sales decline in the city.
“It’s really not the end of the world,” Brad Lamb told CBC News .
“The market here is so well is consistent with employment. There are shortages of rentals, shortages of purpose-built rentals, and shortages of anything to buy,” he elaborated.” I think it’s a whole lot of nothing.”
Lamb added that instead of fleeing Toronto, first-time buyers — who are projected to be among the sectors most negatively impacted by the new rules — will simply “adjust their expectancies downward,” as Toronto’s economic fundamentals are still too stable to depart from.
Moreover, Lamb predicted that the most that the Toronto condo market might experience in the new regulatory government is a “very mild” drop in activity, especially in the $250,000 to $350,000 price range.
However, prominent real estate data analyst Ross Kay stated to differ, saying that the “radical change” would prove to be highly detrimental to the Toronto market, which is already at what he called a “tip-off point”.
“Certainly nowhere in North America has this ever happened,” Kay noted, adding that a “full correction” in Toronto is just beyond the horizon.
In particular, the newly mandated “stress test” on borrowers’ capacity to qualify for payments at the Bank of Canada’s posted 5-year rate of 4.64 per cent for mortgages will merely “wipe out” a significant proportion of new buyers from the market.
Projecting a 17 per cent plunge in the national median sale prices, Kay stated that officials’ hopes of a slow and safe slowdown in the Toronto real estate market are severely misguided.
“They all think you can cool the market. But a market either intensifies forward or it corrects. It’s one or another.”
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