Anyone who reads newspapers and listens to news on the radio and television these days would think that the housing market in Canada – particularly Toronto – is in rough shape. The recent reaction by the government to tighten up on mortgage-lending rules has triggered off a flurry of negative speculation, and I am puzzled as to why. At Baker Real Estate Incorporated, we are even-steven with where we were this time in 2011, which was a record-breaking year for condominium sales. As a sales group, we find the current Toronto market buoyant, and the factors that drive home sales are as strong as ever.
For example, according to the Statistics Canada Labour Force Survey for June 2012, the employment rate actually increased a percentage point over the same month last year. The number of people working in Ontario increased by 20,000 in June, and the province’s unemployment rate is on par with one year ago. It would take a massive unemployment hike to bring down our economy, and it seems to me that is not likely any time soon. We have one of the best economies in the world right now, with a stable government, reasonable unemployment and a continuing stream of immigrants.
And as far as the government’s mortgage rule changes, I question how much a dent they will put into sales. We find that most of our developers demand a 20 to 25 per cent deposit anyway, as well as a contractually corresponding mortgage approval for the outstanding balance. In addition, many buyers put down more than 5 per cent anyway, because they understand the long-term financial benefits of paying off a mortgage earlier.
BILD identifies the land development, home building and professional renovation industry as a major engine of economic growth in the Greater GTA, providing hundreds of thousands of jobs and billions in wages. Putting aside the cyclical nature of the industry, the media and the government would be wise to place more faith in home buyers and applaud their confidence in Toronto, Ontario and Canada.