Toronto drops to 137th place in Global Housing Rankings

After many years of wild real estate activity, Canada’s hot housing markets are experiencing a cooling period, and market observers are noticing.

Toronto has fallen down the world rankings from the globe’s “hottest residential market to one of its weakest” according to HuffPost.

Ontario’s capital city fell to 137th place out of 150 cities in Knight Frank’s residential cities index that looked at 2018’s second quarter. Toronto recorded a 2.8% decline in housing prices. One year earlier, the city placed first, with 29.3% growth year-after-year.

Hamilton, where people outpriced from Toronto often look next for affordable housing, fell from third place to 128th this year.

“Tax changes targeting foreign buyers or higher stamp duty (Vancouver, Toronto, Hong Kong) has led to slower growth at the luxury end of the market,” said Knight Frank, a real estate consultancy.

Vancouver saw its ranking improve on the index, climbing up to 10th place in the world. Last year’s index saw them sit at 52nd. Other cities that saw their placement rise include Ottawa, Montreal and Halifax.

Montreal economist Doug Porter wrote that Canada has “some deep divergences” between its individual housing markets. There is “ongoing weakness in the west and real pockets of strength in the east.”

Cities across the Atlantic now dominate the Global Housing Rankings. Ahmedabad, a city in western India, now claims the top spot, followed by Turkish, Indian and Australian locales.

Stalled housing market

Toronto’s rebounding real estate market couldn’t help it up the rankings, based on numbers below its 10-year average.

“The Canadian housing market finds itself in neutral, with strong population increases and decent job growth countered by rising interest rates and tighter regulatory backdrop,” including a new mortgage “stress test” often cited as a reason behind this year’s slowdown.

“While results vary wildly from region to region, the overall picture is much, much calmer than anything seen in recent years – and that’s a good thing,” wrote BMO economist Doug Porter. “What’s especially remarkable is the broad stability in prices.”