Toronto’s home prices accelerated in October, as the persistent shortage of properties for sale continued to fuel competition and push values higher.
The Toronto Regional Real Estate Board, or TRREB, said its home price index for a typical home, which adjusts for volatility, rose 4 per cent to $1,128,600 from September to October.
The index rose after climbing 2 per cent from August to September, marking the second consecutive month of increases since spring. Home values inflated across the entire region, with the price index for the typical home in suburban Peel topping $1-million for the first time.
“Things are heating up again,” said Leah Zlatkin, mortgage broker with Brite Mortgage, who works in the Toronto region. “People are still aggressively borrowing to buy homes.”
There were 9,783 home resales in the Toronto area in October, with a jump in condo sales offsetting the decline in house sales. That was the second consecutive month of higher activity since March.
However, fewer homeowners listed their houses for sale last month, leading to a 13-per-cent decline from September to October. The volume of new listings is one-third lower than fall of last year.
“We have definitely seen the market tighten since the summer,“ said Jason Mercer, the board’s chief market analyst. With the ratio of sales to new listings continuing to increase, Mr. Mercer said “that suggests more competition between buyers that can lead to an acceleration in price growth.”
The pandemic’s real estate boom has been driven by home buyers’ desire for bigger properties to deal with the perpetual stay-at-home mandates.
But even though most pandemic restrictions have been lifted, home buyers are still seeking more living space in the suburbs.
In Halton, just west of Toronto, the home price index rose 6 per cent from September to October. Compared to fall of last year, the index is up 32 per cent. In Durham, to the east of the city, and in Simcoe, to the north, the index is up 35 per cent year-over-year.
Realtors and mortgage brokers said they expect demand to continue as their clients try to take advantage of the record low mortgage rates.
Major banks have already started to raise their fixed mortgage rates, and the Bank of Canada has suggested it will increase the benchmark interest rate earlier than it had previously forecast.
“It makes them want to buy sooner. They will want to get into the market and secure their [mortgage] rate,” said Michelle Plach, a realtor with Justo Brokerage.
Ms. Zlatkin, the mortgage broker, agreed. “People are getting the antsy feeling to make the move now before interest rates change,” she said.
In the Vancouver area, the country’s priciest real estate market, there was also a decline in new listings. That bolstered competition and prices, though not to the same extent as Toronto.
The Vancouver area home price index for detached and semi-detached houses was up 1.2 per cent from September to October, according to the local board. The index for a detached house reached $1,850,500.
In the Fraser Valley, the index rose for every type of property, with detached houses up 2.5 per cent to $1,396,700. That is 33 per cent higher than October of last year. Resales in both regions were higher month-over-month.
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