New monthly numbers are in for existing home sales and prices in Vancouver and Toronto, and yes, selling prices continue to move higher at a blistering pace furthering a trend through 2015 — a year many thought would mark a breather in each city’s housing boom.
Maybe next year.
In November, benchmark prices in Vancouver surged 17.8 per cent as sales soared 40.1 per cent, the region’s real estate association says. In slightly tamer Toronto, benchmark prices increased a relatively meagre 10.3 per cent as sales climbed 14 per cent compared to November a year ago, making 2015 the most active year on record for the country’s biggest housing market (eclipsing red-hot 2007).
And it appears bidding wars are no longer confined to highly sought after homes in Toronto’s core – they’re taking place in the suburbs, too.
“Competition between buyers has strengthened in many neighbourhoods in the City of Toronto and surrounding regions,” Jason Mercer, the Toronto Real Estate Board’s director of market analysis, said.
The price of a single-family detached home jumped 11.5 per cent in the Greater Toronto Area, TREB said. That figure – high by any historical standard — was overshadowed by the 22.6 per cent jump in detached home prices in the Greater Vancouver area, data from that city’s real board showed.
“November is typically one of the quietest months of the year in our housing market, but not this year,” Darcy McLeod, president of the city’s real estate association, said.
The Vancouver and Toronto markets have firmly decoupled from the rest of the country, where home prices are moving at a far more slower rate of about 2.5 per cent, according to CREA, the national real estate board.
What’s fueling the torrid price gains remains a matter of fierce debate, but many suspect a wave of foreign cash is playing a key inflationary role. Rock bottom interest rates are also continuing to fuel domestic demand.
“An influx of foreign wealth is one driving force, but lower interest rates — and the witches’ spell of forever-low rates—are also stirring the pot,” Sal Guatieri, economist at BMO, said in a recent note.