TORONTO (Reuters) - Home sales in Toronto increased by 23.5 percent in August from a year earlier, the Toronto Real Estate Board said, contrasting sharply with a decline in Vancouver where a tax on foreign buyers was introduced.
The TREB, which represents 45,000 real estate brokers in Greater Toronto, said on Wednesday a record 9,813 sales were reported in August 2016. Home sales in Vancouver fell 26 percent over the same period, the Real Estate Board of Greater Vancouver said earlier this month.
“The conditions underlying strong demand for ownership housing (in Toronto) remained in place, including a relatively strong regional economy, growth in average earnings and low borrowing costs,” said Jason Mercer, TREB’s director of market analysis.
Housing markets in Vancouver and Toronto have seen rapid price increases, fueled by foreign investment and a sustained period of low borrowing costs since the 2007-2009 financial crisis, stirring concern among lawmakers and regulators of potential speculative bubbles in these cities.
Speaking at the Scotiabank Financials Summit in Toronto on Wednesday, Royal Bank of Canada Chief Executive Dave McKay said the bank was more confident about the Toronto market than Vancouver.
“We’re still gaining market share in mortgages but not in Vancouver,” he said. “That’s a conscious choice we’ve made.”
“We certainly feel much more comfortable about Toronto given the diversity of the economy and the number of new immigrants coming in,” McKay added. “I think it’s a more stable market to invest in right now.”
British Columbia introduced a 15 percent tax on foreign real estate buyers in Vancouver in late July, a measure geared at increasing housing affordability for local residents.
The influx of foreign home buyers to Vancouver, mostly from mainland China, has helped make it Canada’s most expensive property market.
Some industry experts have said the tax could steer foreign buyers towards Toronto instead.
Reporting by Matt Scuffham Editing by W Simon