Toronto real estate market still healthy despite plunging sales: John Tory
Toronto mayor also said he's open to a vacant home tax.
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The Toronto real-estate market is "still healthy," said Mayor John Tory, despite new numbers showing the biggest monthly plunge in sales in seven years.
"Toronto real-estate investment is still, I think, an excellent investment for people, so those who bought a house sometime in the last year and a half, I don't think need to feel that they made a mistake," he told Metro at an editorial board meeting Monday.
"They didn't. They've invested in a dynamic, growing city, and I think that over time that will prove to be a very good investment, even though it's a huge amount of money for them to afford to buy a house in Toronto."
New numbers from the Canadian Real Estate Association show home sales are down 6.7 per cent nationally in June compared to May but dropped 15.1 per cent in the GTA. This comes months after the province introduced a suite of policy measures, including a 15 per cent tax on foreign buyers.
Gains in benchmark home prices in the GTA slowed on a year-over-year basis, but benchmark home prices themselves are still up 25.3 per cent year over year.
Last week the Bank of Canada raised interest rates for the first time since 2010.
"The province came forward with a set of measures that were meant to calm the marketplace but not unduly disrupt it," said Tory.
"The result has been consistent with the objective."
Tory said people who are trying or thinking about buying a home will "actually find this all encouraging."
"There's lots of transactions happening, perhaps fewer than was the case before, and the price increases have moderated," he said.
Tory added that a vacant homes tax, which the province empowered the city to enact in April, is "the right thing to look at." A recent estimate from the city based on Toronto Hydro data pegged the number of empty homes at between 15,000 and 28,000.
"If you look at the struggle we have getting affordable rental housing built in the city of Toronto, this is a faster way to get some of them back into the market," he said.
City staff are studying the issue and will report back to the executive committee with recommendations in fall.
Tory added the city is on track to meeting and maybe even surpassing a goal of 1,000 new affordable rental housing units per year through a program called the Open Door Affordable Housing Program.
With files from The Canadian Press