TORONTO – For the past six months, Harold Chizick and his wife have been trying to buy a bigger home in Toronto to accommodate their family of six, but none of the offers they have put in have succeeded.
In that time, the average price of properties in the Greater Toronto Area has soared by more than $160,000.
“While we’ve seen some beauties that we’ve really wanted to be able to buy, we can’t take the risk of overpaying for a property,” says Chizick.
“I know it seems far-fetched but I think at some point the market is going to correct. As a buyer, you have to have that in the back of your head before getting into this bidding frenzy.”
READ MORE: Toronto house sells for more than $1M over asking amid record year for home sales
Chizick’s hope of a market correction may be a gamble given the latest real estate data in the country’s hottest housing market.
Home prices in the GTA continued to climb last month, with the average price hitting $916,567, a 33.2 per cent leap from what it was a year ago, the Toronto Real Estate Board said Wednesday.
The latest figures come as governments at various levels contemplate options aimed at cooling the market.
Politicians, particularly in Ontario, have been under growing pressure to do something about housing prices that have far outpaced fundamentals such as wage growth.
READ MORE: Toronto-area home sales hit record high, up 11.8 per cent from previous year
Ontario Finance Minister Charles Sousa has indicated there will be measures in the upcoming budget to address the housing market. Some of the options under consideration include taxing vacant homes, foreign buyers and speculative activity.
Such measures may help suppress demand, but some have cautioned that they fail to address the real underlying cause of rising prices – the lack of available homes for sale.
“It has been encouraging to see that policy-makers have not implemented any knee-jerk policies regarding the GTA housing market,” TREB president Larry Cerqua in a statement.
“Policy-makers must remember that it is the interplay between the demand for and supply of listings that influences price growth.”
Toronto Mayor John Tory weighed in Wednesday, calling the situation “deeply troubling” for anyone trying to purchase a home.
Realtors have told the government to avoid policies that could knock the industry off-kilter, despite worries that Toronto is on the cusp of a housing price crash like the one it experienced nearly 30 years ago.
Shawn Zigelstein, a sales representative with Royal LePage Your Community Realty, blames dwindling supply for the escalating prices.
The number of properties listed on the market rose by 15.2 per cent from a year ago, but at the same time, the number of sales rose by 17.7 per cent.
VIDEO: Toronto Real Estate Board urges action on supply of housing
Soaring prices have left some homeowners reluctant to put their properties up for sale until they’ve managed to purchase a new home, said Zigelstein.
“They’re just being very cautious,” he said. “They’re waiting for that home that they want to move into to come on the market before they make a move on the selling standpoint.”
Jason Mercer, TREB’s director of market analysis, said that trend will have to reverse itself in order for the city’s housing market to stabilize.
“A substantial period of months in which listings growth is greater than sales growth will be required to bring the GTA housing market back into balance,” Mercer said.
The average price of detached houses in the Greater Toronto Area was $1.21 million in March, up 33.4 per cent from last year. For the city of Toronto, the average price of detached properties hit $1.56 million, an increase of 32.8 per cent from March 2016.
The MLS home price composite benchmark price for all communities measured by TREB was $772,500, up 28.6 per cent from a year ago.
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