York Region was hit hardest by the Ontario Fair Housing Plan introduced two years ago, reports Zoocasa, while Windsor and London home prices have grown substantially.
Those are just a few of the findings the online brokerage discovered when they examined how the 16 measures introduced by the former Liberal provincial government affected the province’s housing market.
The measures included a 15-per-cent foreign buyer tax for non-residents, rent controls for new builds and incentives for developers.
“The changes had an immediate psychological impact on the market. Local real estate boards noted a large influx of listings in the following months, as skittish sellers looked to cash in before the market went soft. As a result, a number of housing markets within the province experienced double-digit per cent price and sales declines, especially among higher-priced single-family home types,” writes Penelope Graham, managing editor of Zoocasa.
Just a short while later the federal bank regulator announced a mortgage stress test, which forced buyers to qualify at 2 per cent higher than their contract rate, or the Bank of Canada’s rate, whichever higher. It’s impossible to disentangle the Fair Housing Plan from the effect of the stress test.
To analyze the changes, Zoocasa checked sold home prices and sales-to-new-listings ratios and compared April 2019 to April 2017 data.
The results they found were uneven.
York Region was clearly hit the hardest, with prices in some cities falling over 30 per cent and experiencing a notable decline in activity. Property prices in Newmarket, Aurora, Richmond Hill and Markham all dropped between 30 to 24 per cent in the two-year time frame. That’s likely because detached houses became largely unaffordable once borrowing tightened, and this area is largely composed of larger, expensive single-family homes. Sellers also became increasingly wary of listing their homes, and new listings dropped in the double digits. This has led to an overall flat market, with not much activity.
But southwestern Ontario appears to have benefited somewhat from the housing measures, potentially because houses there were cheaper to begin with, and buyers with reduced affordability were pushed out of larger cities and into this region. Sellers are taking advantage of the situation, and new listings have risen in lock-step with the rising prices.
Waterloo real estate rose 3 per cent, prices for Guelph homes for sale rose 1 per cent and prices for MLS listings in London, Ontario rose 19 per cent. But the real winner is the Windsor-Essex region, which rose a full 25 per cent in just two years.
It’s unclear how the Fair Housing Plan will affect the market in upcoming years, especially since a new Conservative government has the majority now.
Rollbacks have already begun on rent controls, and there’s been no apparent interest to implement some suggestions included the Plan, such as exploring a vacant home tax.
We’ll have to wait and see how market conditions evolve in this new landscape.
For now, check out the infographic below to see how the Fair Housing Plan has affected every major city in the province two years later:
Zoocasa.com is a leading real estate company that combines online search tools and a full-service brokerage to empower Canadians to buy or sell their homes faster, easier and more successfully. Home buyers can browse real estate listings on the website or the free iOS app.