LEASIDE – HOW THE FORMER TOWN IS DREADING THE FAIR HOUSING PLAN 2017
By Alex Pino, Broker Arch FRI – Senior Vice President Sales – Sotheby’s International Realty Canada
Leaside is one of the most attractive neighbourhoods for families who want to be able to raise kids with traditional values in a safe and tight-knit community. There is always a sense of calm when you enter the natural boundaries of the neighbourhood. Coming from anywhere in the city, province or out the country, the moment you get off Bayview, Eglinton or Laird you feel a sense of tranquility, called home.
We have been Leaside residents for over 13 years when we first moved in, attracted by the garden city urban design following my past life as a foreign trained architect, great family living with kids playing on the streets, good school education, proximity to parks and easy access to downtown. Over these years, I have seen how little by little the former town is changing in character with prices that have reached a multi million-dollar status.
Statistics are always good to review as it gives us an indication of how the market is performing in different segments. The understanding of the numbers is what makes a difference so here is an evaluation of the home prices in Leaside with special emphasis on how the neighbourhood is performing this year following the introduction by the government of the Fair Housing Plan Act on April 20, 2017 that included a 15% tax for foreign buyers and expanding rent control to all properties rented in the Province.
The real estate market in the city has traditionally shown two cycles with an increase in the number of listings, sales and price appreciation during the peak months of April-May and September-October. This year has been extraordinary as there was a huge spike in the prices fuelled by a low inventory of new listings and external capital pouring in the real estate market. Though there have not been concrete figures as of the percentage of foreign or out of the province buyers, it is not a mere coincidence that Toronto and the GTA saw a huge surge in prices after Vancouver imposed a foreign buyers tax at the end of 2016.
I am going to concentrate on the freehold detached and semidetached houses in the neighbourhood, as they comprise the highest number of dwellings in Leaside. I decided not to include new townhouses, condos, and multiplex units, as their figures are low, though they are also an important segment that I will provide analysis for in the months and years to come. Condos are a norm in the city and Leaside is not an exception so we will have to get used to the intensification that is already happening on Eglinton and major thoroughfares in the area.
Comparing the September figures from 2016 to 2017, the total amount of houses sold is down by 19%. It is important to note that the decrease has been after the measures were implemented, which may indicate that both Sellers and Buyers were in the sidelines waiting to see what the effect of the government changes was going to have in their particular market.
Prices have acompletely different outcome and we need to go in more detail:
Detached new and renovated houses have responded strongly to the imposed measures and have not shown any sign of price adjustment. New houses have shown an increase of 4.81% and renovated houses a 3.85% increase.
Detached original or partially renovated houses have come down in price by approximately 13.45%.
Semi-detached renovated have come down in price by 7.36% and original or partially renovated are down by 8.91%.
Bungalows are the most affected houses by the government measures as their price has decreased by 25.42%
The days on the market (DOM) are just about the same, going from 11 to 14 days average. The sales to listing ratio (S/L) is really shocking as before the government measures it went from 99% all the way up to 127% and after it has come down to 95% to 101%. This is a clear indicator of the extra heated market we all experienced in the first months of the year, which was the catalyst for the government to take action and try to cool down the market with the Fair Housing Plan measures introduced.
Leaside has a bright future ahead with some key points that will put extra pressure on the prices, including a better transportation system with the future Laird and Bayview LRT stations, lack of inventory, low interest rates, unavailability of low rise development land, massive immigration numbers, low unemployment rate and a safe and stable city, which are all part of the real estate success equation.
It is of the utmost importance to take this evaluation as a reference as every house has particular features. The reader needs to seek expert advice to determine the market value of a property and a more detailed analysis is required.