These were the 7 most shocking Toronto housing market stats of 2017.


1. In January, the average price of a detached home in the GTA reached an all-time high of $1,316,325 — a decade before it was only $444,368.

2. In February, there were a mere 534 new detached homes in builder inventories the GTA, a record-low level of supply that had industry watchers worried about where prices might head next.

3. In February, GTA listings were down 50 per cent year-over-year, as demand surged to record levels. “The upshot is that the largest housing markets that have been responsible for the biggest house price gains over the past two years are now approaching a potentially dangerous tipping point,” wrote Capital Economics senior economist for Canada David Madani at the time.

4. Sales jumped 15.2 per cent year-over-year in March to 12,077, while the average price of a home shot up a dizzying 33.2 per cent to $916,567.

5. As the buying frenzy reached a peak in March, GTA homebuyers bought a whopping $11,069,381,891 worth of property.

6. That same month, an average GTA home stayed on the market for only 10 days.

7. After a summer that saw the market cool dramatically, in August eight GTA municipalities saw detached home prices collapse by 20 per cent from April, when the Fair Housing Plan was announced.

Rent increase guidelineFor 2017: the rent increase guideline is 1.5% for increases between January 1 and December 31, 2017.

For 2018: the rent increase guideline is 1.8 % for increases between January 1 and December 31, 2018.

Who it applies toThe guideline applies to most private residential rental units covered by the Residential Tenancies Act.
The guideline does not apply to:

• vacant residential units
• social housing units
• nursing homes
• commercial properties

When can rent be increasedIn most cases, the rent for a unit can be increased 12 months after:

• the last rent increase
• a tenant first moves in

A tenant must be given written notice of a rent increase at least 90 days before it takes effect.
How the guideline is calculatedIt is calculated using the Ontario Consumer Price Index, a Statistics Canada tool that measures inflation and economic conditions over a year. Data from June to May is used to determine the 2017 guideline for the following year.
A sample calculationYour monthly rent was increased to $1,000 on June 1, 2017. The guideline for 2018 is 1.8%. Therefore:

• an increase of 1.8% on $1,000 = $18.00
• $1,000 + $18.00 = $1,018.0

Your landlord could lawfully increase your rent payment 12 months later on June  1, 2018 up to $1,018.00 per month
Your landlord would need to provide you written notice at least 90 days before June  1, 2018.
Additional information
For more information on the rent increase guideline, contact the Landlord and Tenant Board:

• by email
• 1-416-645-8080 (in the Toronto area)
• 1-888-332-3234 (toll free, outside the Toronto area)
  

According to the Office of the Superintendent of Financial Institutions (OSFI), tougher mortgage qualifying rules will take effect as soon as January 2018.
Why is this so important?
If you barely qualify for a mortgage now, you won’t in 2 months.
The new OSFI minimum qualifying rate, also known as the “stress test”, will be a requirement for all home buyers, including pre-construction condos, resale, freehold, and others requiring a mortgage. Presently, prospective home buyers with down payments of 20% or greater are not required to purchase mortgage insurance, and therefore forgo any preliminary testing.
Come January, new home buyers who fall under the uninsured borrower umbrella will submit to the same assessment as insured borrowers, with the qualifying rate ensuring that new mortgages, regardless of the down payment size, will be able to pay the loan if interest rates become higher than they are today. Meaning that, borrowers will be tested at either greater than the five-year benchmark rate, or two percent higher than their actual mortgage rate- whichever one is higher.

This equivalent of a 2% rate hike will equate to a drop of approximately 15-20% in purchasing power.
By the new year, some potential mortgagees may no longer be able to afford buying real estate.
With the help of Ratehub.ca’s Mortgage Affordability Calculator, here is an example of how the numbers tally up now, versus just about two months from now.

OCTOBER 2017 Vs. JANUARY 2018

Example:

Buyer’s mortgage rate is lower than the bank of Canada’s five-year benchmark rate

Current Bank of Canada Benchmark: 4.89%

Annual Income: $100,000

Down Payment: 20%

5 Year Fixed Mortgage Rate of 3.09%

Amortized over 25 Years

Results:

October 2017 maximum affordability: $706,692

January 2017 maximum affordability: $559,896


*Noteworthy:  The new stress test rules will not apply to mortgage renewals as long as you remain a client of your existing lender.

December 18, 2017 -- On December 13, the Federal Government took steps to clarify new rules around tax planning using private corporations.
The Minister of Finance proposed explicit rules for business owners that suggests the following individuals will be exempt from new income sprinkling rules:

• Business owner 65 years of age or older, sprinkling with a spouse is permitted in the same way that pension income can be split among spouses
• Adults 18 years of age or older, provided they work on average at least 20 hours per week in the year or during the previous 5 years
• Adults aged 25 years or older who own at least 10% of the shares of a small business (unless the corporation is a professional corporation or a corporation that earns less than 90% of its income from services or earns its income substantially all from a related corporation). 

If the exclusions above do not apply, a reasonableness test will be imposed that will be monitored and enforced by Canada Revenue Agency auditors.
CREA announced it will review the changes closely with its tax experts and continue to work with the government to ensure further changes are fair and adequate for real estate business owners across the country.

Read the full release from CREA here.