Home prices in red-hot Toronto race higher and higher
The real estate board for the country’s largest, and arguably hottest, housing market said Monday prices are up nearly 10 per cent again through the first two weeks of August compared to the same two-week stretch last year.
That sizable gain is well above where many experts saw home prices trending a year ago.
The average home in the greater Toronto area is selling for $538,530 at the moment, the Toronto Real Estate Board said in its mid-month update, amid “tight market conditions, especially for detached and semi-detached houses.”
That average home was exactly 9.4 per cent more expensive compared to last August, when experts were suggesting the Toronto market was about to enter a lengthy slowdown amid rising interest rates.
Aside from some seasonal weakness related to a brutally cold winter, there’s been no slow down.
“We’ve been seeing the average year-over-year gain in and around that [10 per cent] neighbourhood for the last few months,” said TREB’s Jason Mercer, who heads up market analysis for the board.
Here’s how home prices in the greater Toronto area have performed dating back to January 2005.Click here to view data »
Experts suggest the persistence of extraordinarily low borrowing rates are priming a market many believe is overvalued by at least 10 per cent.
“Low interest rates continued to fuel the Canadian housing market,” Leslie Preston at TD Economics said in a research note last week.
Preston cautioned, “existing home prices are on track to outstrip income growth for a second straight year … which adds to concerns about an already-overpriced market.”
Demand from buyers
Still, in Toronto buyers are lining up even in the face of sky-high prices.
Homes in the GTA are being snapped up at a faster pace this month compared to last August, TREB said, indicating that “competition between buyers increased relative to the same period last year,” according to Mercer.
Broken down by home type, TREB’s mid-month data show still huge demand for detached homes despite their far higher price tag compared to condos and townhouses. Detached prices are up 12.3 per cent on average across the metro area and suburbs, to $692,402.
Semi-detached homes sold for an average of $504,224, up 9.9 per cent.
Toronto’s closely watched condo market continues to remain in positive territory as well – even as fears remain about the record number of units that have been built in recent years, which have yet to be fully absorbed by the market place.
Condo prices are up 2.6 per cent on average, according to TREB, to $353,136.
The numbers follow the release of average prices for July across the country from the Canadian Real Estate Association.
Here’s how prices on an average single-family home stack up across the country:
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