Toronto Real Estate Market 2019 - A Tale Of Two Markets

April 5, 2019

Toronto Real Estate Market 2019 - A Tale Of Two Markets

By David Dunkelman: Broker, Royal Lepage Signature Realty

What exactly is going on in the Toronto Real Estate market these days ? The market for homes and condos under $1 Million is extremely strong with many new listings attracting multiple offers and selling for asking or above in just a matter of days. However; the market for listings above $1 Million is lukewarm. Yes, many of these listings are also selling quickly but an increasing number are not. So what gives ? Well the only reasonable explanation is the new mortgage rules. Yes, I am referring to the mortgage stress tests, but more likely the culprit is the Government of Canada's decision in 2016 to mandate that CMHC eliminate mortgage insurance on many products including home purchases of $1 Million or more. Under the old rules with an insured mortgage you needed a $50,000 downpayment to buy a home for $ 1 Million, whereas today with an uninsured mortgage you need a $200,000 downpayment to buy the same home. In short that is a deal breaker for most buyers and helps explain the tale of two markets.

*Thank you to David Plaxton, Mortgage Architects, for contributing to this article.