Property Tax Hikes in T.O., and Why Some Say This is the Year for Luxury Home Sales

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This week’s top real estate stories.

By Jared Lindzon | 2 minute read

Feb 2

Every Friday, Wahi brings you the most important real estate stories from the past week.

Torontonians Brace for Tax Hikes

Toronto’s 2024 budget process is entering its final phase ahead of a Valentine’s Day vote, but homeowners aren’t loving the plan. The city is weighing a steep 10.5% property tax bump this year — which it says amounts to an increase of just $1 per day for the average homeowner — to help address its $1.8 billion shortfall. Toronto is also considering a 10% levy on for foreign buyers to kick in after the province’s 25% foreign buyer’s tax expires at the end of 2024. Mayor Chow, however, hopes to minimize the pain for multi-residential dwellings with a modest 3.75% tax hike.

“Sotheby’s says the luxury market had a rocky year in 2023, with high end sales dropping 20% in Toronto and 22% in Montreal, while increasing 8% in Vancouver and 13% in Calgary. Rising condo fees, maintenance and carrying costs also pushed buyers away from luxury condos and towards houses.”

Canada’s Housing Crisis Could Last into the Late 2030s

Canada’s housing crisis is just getting started, according to a depressing new study conducted by Atlus Group. According to the real estate services and software provider, the country’s housing supply won’t catch up to demand for about 10 to 15 years. The report blames cumbersome government approval processes, higher taxes, and a skilled labour shortage for a lack of development. In fact, they say it now takes 25% to 30% longer to build compared to five years ago. With 20% of construction workers set to retire over the next eight years, things will probably get worse before they get better.

2022 Was a Bad Year to Be in the Real Estate Biz

The Real Estate Industry had a rough 2022, according to a new report by Statistics Canada, which shows a 21.8% drop in agent and broker revenues compared to the record highs of 2021. That includes a whopping 27% decline in British Columbia and a 26% decrease in Ontario. Now you might be asking yourself, “Isn’t it 2024?” and you (and your calendar) would be correct, but apparently official data takes a long time to collect. Now hang on to your hats because the agency is boldly predicting 2023 will be another difficult one for the sector. Consider yourself warned.

It’s a Good Time to Buy Luxury Real Estate, Says Seller of Luxury Real Estate

Canada’s luxury real estate market had a quiet 2023, according to Sotheby’s, making 2024 the perfect time to shop for a multi-million-dollar property. In its 2023 Top-Tier Real Estate review, the luxury home seller says the market had a rocky year, with high end sales dropping 20% in Toronto and 22% in Montreal, while increasing 8% in Vancouver and 13% in Calgary. Rising condo fees, maintenance and carrying costs also pushed buyers away from luxury condos and towards houses. Sotheby’s adds that a glut of supply and limited competition will make 2024 a good time to be an affluent home buyer.

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Toronto Home Construction Is in a Tailspin

When it comes to new home construction, Toronto appears to have entered the death spiral. The city desperately needs more homes to improve affordability, yet construction remains at records lows, because buyers can’t afford the existing inventory, in an infuriatingly real chicken and egg conundrum. According to CMHC housing starts dropped 35% in Toronto in December, but it’s hard to blame the Building Industry and Land Development Association. According to their latest research, there were only 554 new home sales that month, representing a 67% drop from the 10-year average, while inventory sits at a nine-year high.