A housing shortage in Southern and Eastern Ontario is driving up home prices, and there is no relief in sight.
The benchmark price of a typical home sold in January rose 8 per cent to $840,900 in the Toronto region compared with the previous year, according to the Canadian Real Estate Association (CREA).
Home prices in the nearby cities of Hamilton and Burlington climbed 8 per cent in January, the Niagara region rose 10 per cent and Ottawa jumped 14 per cent.
“Home price growth continues to pick up in housing markets where listings are in short supply," CREA president Jason Stephen said in a statement.
Since February of last year, the supply of homes for sale has steadily shrunk in Ontario. Last month, the province had 1.93 seasonally adjusted months of remaining inventory, assuming sales activity remained the same and no new supply came onto the market, according to CREA. In January last year, the inventory measurement was 2.71 months.
“We haven’t seen inventory this low in at least several years,” said Christopher Alexander, Re/Max’s regional director for Ontario and Eastern Canada. “You go neighbourhood by neighbourhood and there is just nothing for sale."
The association said Ottawa was one of the tightest markets in the country. Although sales in January were lower than the previous year, that was because of the dearth of homes for sale. “It’s hard to get sales when you don’t have listings,” said Shaun Cathcart, senior economist with the association.
In the Toronto region, realtors have described a hectic January with some homes getting upward of 20 offers.
Re/Max’s Mr. Alexander said it is a similar situation in Ottawa. “We will continue to see tight supply because there is no way for developers to keep up with demand," he said.
In contrast, the national inventory level is slightly higher, with the greatest supply found in Saskatchewan and Newfoundland and Labrador, according to CREA. The country’s benchmark home price rose 4.6 per cent to $648,600 in January compared with the previous year. Ontario’s price growth offset a drop in prices in the Vancouver region, Edmonton, Calgary and Regina.
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