- Related article: Surge in homes for sale will alleviate prices
July 5, 2012
The Toronto board is blaming the city’s land transfer tax to explain the 13% decline in sales in the city versus the 5.4% overall Greater Toronto Area.
Property sales in Canada’s largest city dropped 13% last month, the Toronto Real Estate Board reported Thursday, a day after Vancouver reported a 27.6% plunge.
Sales in the city of Toronto were down 13% in 2011 from a year ago with 9,422 transactions in June. For the entire Greater Toronto Area sales were off 5.4% from a year earlier.
The board for Greater Vancouver reported June sales on Wednesday at a 10 year-low, diving 27.6% from a year ago and 17.2% from just May.
But while Vancouver blamed the decline on a slowdown in the housing market, the Toronto board is blaming the city’s land transfer tax to explain the 13% decline in sales in the city versus the 5.4% overall.
“Buyers continue to face the substantial upfront cost associated with the City of Toronto’s unfair land transfer tax,” said Ann Hannah, president of TREB “Recent polling by TREB suggests that many households are considering home purchases outside of the city of Toronto to avoid paying the land transfer tax. This goes a long way in explaining the disproportionate decline in sales in the city versus surrounding regions.”
On the average home in Toronto, the city’s land transfer tax is now adding $6,806.54 to the purchase price. That tax is addition to the $7,556.54 the province takes in tax. Residents outside the city of Toronto only pay the provincial tax.
TREB says the average home in Toronto sold for $554,077 in June, an 8.3% increase from a year earlier. Overall the average selling price in the GTA was $508,622, a 7.3% jump from June, 2011.
“According to new mortgage lending guidelines set out by Finance Minister Jim Flaherty, the GTA housing market remains affordable. The share of the average household’s income going toward major home ownership payments for the average priced home remains below the 39% ceiling recently announced by Mr. Flaherty,” said Jason Mercer, senior manager of market analysis for TREB. “The average household in the GTA continues to benefit from a considerable amount of flexibility to account for higher interest rates moving forward.”
Ilan Joseph is a Real Estate Broker with Sutton Group and is co-founder of a 10-person award-winning Toronto real estate team. You can find him on Twitter and Google+. For over 10 years, Ilan has provided more than 1300 buyers and sellers valued advice and service, enabling them to reach their real estate goals. He’s kind of like the Bruce Willis of real estate.