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Ontario Home Price Changes: Impacts of the Fair Housing Plan

Written by Posted On Thursday, 06 June 2019 06:20

In April 2017, the Liberal provincial government decided to address their long-held concerns regarding Ontario’s housing market. They designed and implemented 16 measures that were intended to slow rampant price growth, cool speculative demand, and boost rental supply across corresponding markets. 

Coined the “Fair Housing Plan”, this plan introduced changes that many residents appreciated. The most notable of the new regulations included a 15% Non-Resident Speculation Tax for foreign purchasers, as well as rent controls that regulated rent increases to a specific limit.

Instant Changes Across Ontario Markets

The changes had immediate impacts on Ontario’s housing market. Local real estate boards noticed an increase in new listings as sellers tried to cash in before the market softened. Consequently, home sales and prices experienced a remarkable drop, especially among expensive single-family home types in the province. 

York Region Impacted Most

The data indicated that Newmarket, despite being a more expensive region, experienced the biggest drop in sales price from April 2017. It declined by a shocking 30% to a benchmark price of $725,710. Historically, the average price of Newmarket homes has hovered around the $1-million mark. Despite the significant drop in price, the market actually tightened due to a contraction in listings by 42%. Fortunately, this has influenced a sales-to-new-listings ratio of 45%, which pushes Newmarket into a balanced market. 

Aurora and Richmond Hill follow close behind Newmarket in terms of sales price decreases.

The city of Aurora experienced a price decline of 30%, also dipping below $1 million to a benchmark price of $888,387. Both sales and new listings also dropped significantly, at 35% and 34% respectively. This left the sales-to-new-listings ratio virtually unchanged, at 42%. Richmond Hill’s home prices, on the other hand, fell by 27% to $1,016,216. The 25% decrease in sales has also outpaced their 21% contraction in new listings, taking the market into buyers’ territory with a sales-to-new-listings ratio of 38%.

Though less dramatic, other Ontario markets have experienced price drops as well. Declines in average home prices were noticed among Burlington, Milton, and Hamilton MLS listings since the Fair Housing Plan. These cities were among the few markets that experienced a decline in home prices while remaining in a sellers’ territory for April 2019.

Growing Markets: Southern Ontario and Ottawa

While some markets have taken a hit with the new regulations, others have surprised Ontarians by withstanding the changes. Interestingly enough, they have been secondary markets backed by strong employment. Over the last two years, those markets have experienced price increases but still remain below $500,000 for average home prices.

A notable region includes the Windsor-Essex community, as sales have remained flat and supply increased by 16%, classifying it as a sellers’ market. This has put pressure on average prices, which have increased by 25% to $343,956. London is experiencing similar patterns, as their prices continue to increase with average home values up by 19% to $429,058. With a 15% decrease in sales and a 3% decrease in listings, their sales-to-new-listings has landed at 72%. This has posed challenges for buyers, as limited supply has encouraged bidding wars. 

Other markets have experienced increases in home prices, but hover just above $500,000 in terms of average home price. Barrie homes for sale and Waterloo real estate have increased in average price since the Fair Housing Plan. Barrie homes currently stand at an average price of $563,527, increasing by 7%, and Waterloo homes currently stand $561,531, increasing by 3%. 

It is clear that the Fair Housing Plan has made its mark on Ontario’s housing market. For further information on changes in real estate, check out Zoocasa’s infographics above.

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