The first victim if Toronto’s housing market crashes? McMansions

Speculation is swirling as the Canadian city's housing bubble continues unabated despite cooling measures

New York Weekend Edition /
Mar.March 18, 2018 03:58 PM

Toronto. (Credit: The City of Toronto, Pixabay)

Some view the existence of McMansions as categorically bad architecture, but, whether deemed tasteful or not in the eye of the beholder, they will likely be the hardest hit if the city’s bubble bursts.

The verdict comes from Canada Mortgage and Housing Corporation’s deputy chief economist, Aled ab Iorwerth, who told the Financial Times, that detached, well-located homes are already seeing pricing drops due to a string of cooling measures banks and government has introduced since April 2017.

Toronto’s market has been overheating for years and experts have been trying to warn buyers off what seems like an inevitable crash — “It is going to end in tears,” warned one analyst in 2016 — while Torontonians looking for homes have gotten increasingly desperate in the search for homes.

Cooling measures were introduced to widespread support, but it might be too late — particularly as a heightened emphasis on foreign buyers as the cause of the overheated market is not borne out in the data, which the Times explains as a result of easy lending rules, low mortgage rates and Canadians’ penchant for buying second homes.

Meanwhile, the measures are starting to have an effect: Knight Frank logged a 6 percent drop in prices for prime homes in the fourth quarter of 2017. The Toronto Real Estate Board also logged a 19 percent decrease in home sales last fall.

According to the Times, McMansions in the city’s wealthy enclave, Hoggs Hollow and Bridle Path, where homes are priced on average at $2.6 million, are likely see their home values drop the furthest. [FT]Erin Hudson


Related Articles

arrow_forward_ios
Vector Group/Douglas Elliman's Howard Lorber (iStock, Getty Images, Vector Group Ltd., Douglas Elliman)
Howard Lorber’s $1.8M salary at Elliman offset by Vector pay cut
Howard Lorber’s $1.8M salary at Elliman offset by Vector pay cut
Fredrik Eklund with Tyler Whitman, Ryan Serhant, and Kirsten Jordan and Steve Gold (Getty, Bravo TV)
“The end of an era”: Fredrik Eklund quits Million Dollar Listing
“The end of an era”: Fredrik Eklund quits Million Dollar Listing
BHS CEO Bess Freedman and BHS agent Madison Sutton (BHS, iStock)
Brown Harris Stevens adding TikTok training to its arsenal
Brown Harris Stevens adding TikTok training to its arsenal
30 Front Street #30A and 72 Poplar Street (Streeteasy)
$8M Dumbo condo tops Brooklyn home contracts
$8M Dumbo condo tops Brooklyn home contracts
From left: Bruce Blakeman, Nassau County Executive, and Laura Curran, former Nassau County Executive (Getty Images, iStock/Photo Illustration by Steven Dilakian for The Real Deal)
Nassau County freezes assessments after home-price surge
Nassau County freezes assessments after home-price surge
160 West 12th Street and 200 Amsterdam Avenue (Corcoran, SJP Properties)
Village, UWS condos tie for Manhattan’s priciest signed contract
Village, UWS condos tie for Manhattan’s priciest signed contract
From left: Don Mullen, chief executive officer, Pretium Partners; Kelli Lawrence, chief executive officer, Onyx+East (Pretium Partners, Onyx+East, iStock)
Pretium to launch $600M JV for build-to-rent development
Pretium to launch $600M JV for build-to-rent development
Fairfield County (iStock)
Looking for a home in Connecticut? Good luck
Looking for a home in Connecticut? Good luck
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...