The average price of a home sold in Toronto breached CA$1 million for the first time in February, with gains accelerating in the suburbs around Canada’s largest city.
Prices in the Toronto region shot up 14.9% from the year before to CA$1.05 million as bidding wars broke out on properties that came up for sale, according to a release today from the Toronto Regional Real Estate Board. It’s the second Canadian city to join the million-dollar club after Vancouver.
“It’s clear that the historic demand for housing experienced in the second half of last year has carried forward,” Lisa Patel, president of the Toronto real estate board, said in a statement accompanying the report. “The supply of listings is not keeping up with demand, which could present an even larger problem once population growth picks up following widespread vaccinations later this year.”
The Covid-19 pandemic caused an unexpected boom in demand for housing, with the ubiquity of remote work spurring demand for larger homes even as record low mortgage rates increased people’s ability to pay for them.
In Toronto, a stay-at-home order is still in effect and demand for upgraded living space appears to be growing. Ground-level homes in the suburbs were the drivers of February’s price gains. Detached homes in the 905 area code, which surrounds the city of Toronto, rose 27.8% to CA$1.3 million.
But the market is getting so frenzied it’s even bringing life to the downtown condo market that has been hardest hit by the flight to bigger homes. Though average condo prices were still down in February, that segment led the way in sales growth, with transactions surging 64% as bargain hunters piled in, the data show.
“In the absence of a marked uptick in inventory, the current relationship between demand and supply supports continued double-digit average home price growth this year,” the real estate board’s chief market analyst, Jason Mercer, commented in the report.
“If we continue to see growth in condo sales outstrip growth in new condo listings in Toronto, renewed price growth in this market segment is a distinct possibility in the second half of the year.”
MBN
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