Spring has finally sprung across the GTA and after weathering what seemed to be a winter without end, the Toronto housing market continues to heat up. Despite weakened market conditions in other Canadian cities, Toronto flexes its muscles as high-end home sales surge. With the average selling price for a detached home steadily increasing since it hit the $1 million mark in February, the deterioration of the Toronto real estate market is not in the foreseeable future.
According to an announcement made by Toronto Real Estate Board President Paul Etherington, Greater Toronto Area REALTORS® reported 8,940 sales last month — an 11 per cent increase compared to March, 2014. The average selling price for all reported transactions was $613,933 — representing a 10 per cent increase above reports recorded the same time last year. Overall, the number of home sales across the City of Toronto and the surrounding regions were greater than the numbers we saw in March 2014. Among these sales, detached homes led the pack last month with an increase of 15.9 per cent in a year-over-year comparison. Interest rates may be a contributing factor to increased sales, which might help compensate for record high prices, keeping affordability within reach.
New listings have also gone up, however, not as much as most would hope — seeing an increase of only 5.5 per cent compared to March of 2014, the shortage of houses for sale in Toronto brings competitive buying conditions. A lack of active listings combined with peak buying/selling season drawing near, hopeful homebuyers will have to roll up their sleeves and prepare for bidding wars, as market conditions will only get tighter.
Condominium and townhome sales have also gone up significantly, suggesting that Torontonians may be opting for more affordable entry-points into the real estate market. “… the number of buyers has more than kept up with the number of units available for sale. This is why we continued to experience above-inflation average price growth in the condo segment,” said Jason Mercer, TREB’s Director of Market Analysis. With low-rise detached homes becoming a rare commodity in the city, it may also suggest that people are choosing to purchase homes at their original listed price or lower, avoiding the bidding wars that are associated with detached homes.
Image source: Toronto Real Estate Board
Currently, the Toronto Real Estate Market can be summed up in a quote by economist Thomas Sowell,
“The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it.”
