Regulations can’t hold Toronto’s condo market down.
Condo prices have risen 20 percent compared to February last year, according to Bloomberg, while sales of detached homes sank by more than 10 percent. Regulations were supposed to decreases for both markets, but an unexpected twist has occurred.
On January 1, new mortgage regulations that required buyers to prove they could afford payments at least 2 percentage points higher than the price they go into contract at, as Bloomberg reported, which, in addition to higher interest rates, was supposed to dampen prices.
Instead, it’s pushed would-be homebuyers into the condo market and investors into becoming apartment landlords.
For market that’s constantly referenced as a bubble waiting to burst, some agents are getting nervous.
“I’ve been looking at the condo market for years and I’ve been waiting for it to correct and it’s just not happening,” said agent Patrick Rocca to Bloomberg. “Honestly, this scares me. When you have condos selling at C$1,000 to C$1,200 per square foot for resale, that’s mind-boggling.”