A report on price declines arrives just as Toronto real estate lobbyists are pushing back against proposed tax hikes on luxury properties
Housing in some of the most coveted neighbourhoods in Toronto dropped as low as 30 per cent in value over the past year, according to a February 2021 report from real estate platform Strata.
The Annex was the hardest hit with 29.96 per cent, followed by the Bloor-Yonge area, Yorkville and Casa Loma falling 11 to 12 per cent.
According to Strata, rental values in these areas also took a plunge: Annex rentals fell 11.5 per cent while the drops in Bloor-Yonge, Yorkville, Casa Loma and the Bay St. Corridor are all around 20 per cent.
Meanwhile, according to the Canada Mortgage and Housing Corporation’s 2020 rental market report, average prices for a two-bedroom went up 3.6 per cent in 2020 to $1,165.
“I have investor clients who were once so proud to own a property in a luxury neighbourhood,” says Strata real estate agent Sam Massoudi, in the report. “But they had no idea a pandemic like this was going to hit and drive immigration out of the city. So now some of them have sold. For those who didn’t, they’re renting these places out for very cheap. That’s why we’re seeing such low rents in some luxury areas.”
The Strata report arrives just as the Toronto Regional Real Estate Board (TRREB) is expressing opposition to a potential Municipal Land Transfer Tax (MLTT) hike on the most expensive homes in the city.
According to a statement TRREB published on Friday, February 12, they are concerned the City Council will consider increasing the MLTT on homes that cost over $2 million to make up for lost revenues during the pandemic.
These concerns stem from deliberations by the City’s Budget Committee that were voted down in the past.
“We have an affordable housing crisis,” Councillor Brad Bradford told CTV News, explaining that the city is looking for where they can generate revenue for the things Toronto needs. “We certainly have a lot of issues related to transportation and mobility.”
“TRREB understands and appreciates the budgetary challenges faced by the City of Toronto,” TRREB president Lisa Patel says in the statement, “but addressing those challenges in a way that would make housing even less affordable is the wrong path forward.”
According to TRREB, the average price for a home in the city of Toronto in January was $866,331. That average break down as $1,581,400 for detached, $1,204,857 for semi-detached, $814,396 for townhomes, and $624,886 for condos.
TRREB echoes sentiments expressed by the Ontario Real Estate Association’s CEO Tim Hudak last fall. They say a hefty land transfer tax on pricier homes would discourage those buyers who are looking to move up to bigger spaces within the city, and discourage them from listing their own more slightly affordable homes.
TRREB is raising these concerns days after releasing a 2021 outlook report that projected real estate sales in the Greater Toronto, South Simcoe County and Orangeville areas to reach 105,000, which they call “a near-record.”
TRREB also anticipates the average price for all home types in the Greater Toronto Area to surpass the $1,000,000 in 2021. That average was $967,885 in January, a 15.5 per cent hike over the year before.