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Toronto’s home values accelerated in November for the third straight month as the shortage of properties for sale stoked competition and “desperate” buyers raced to get into the market before prices escalated further.

The home price index for a typical property, which adjusts for volatility, rose 4 per cent to $1,172,900 from October to November, according to the Toronto Regional Real Estate Board (TRREB). That monthly spike in prices comes after a 4-per-cent rise in October and a 2-per-cent rise in September.

“We are seeing buyers desperate and scrambling to get in before the affordability worsens,” said Laura Martin, chief operating officer of mortgage brokerage Matrix Mortgage Global. “If you see something you like, you get it. You don’t wait.”

The home price index is up 28 per cent in the 12 months to November. Over the course of the pandemic, the price index is up 40 per cent. The typical home in most of Toronto’s suburbs now costs more than $1-million. In the region of Durham to the east of Toronto, which was once considered affordable, the home price index was up 5 per cent in November, 5 per cent in October and 3 per cent in September. There, the home price index is nearing $1-million.

The last time home prices accelerated at this pace was in the first quarter of 2017, according to TRREB. That was near the peak of the previous real estate boom in Toronto and Vancouver, and spurred the federal government to impose tougher borrowing rules and taxes on foreign buyers.

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But today’s homebuying is mostly domestic, with investor purchases doubling in the past year, according to recent Bank of Canada research. That has increased competition and values in a market with a shortage of properties for resale.

Compared with November of last year, Durham’s home price index is up 40 per cent. In the Simcoe region north of the city, the price index is up 35 per cent year over year. In Halton, to the west, the home price index is up 34 per cent.

“The supply [of homes for sale] is not getting better,” Ms. Martin said, adding that the percentage increases will remain in the double digits until that is fixed.

The Toronto region had 9,508 resales on a seasonally adjusted basis last month. Although that was a record for November, the volume was down 2.5 per cent from October.

Many buyers priced out of houses have turned to condos, which generally cost less. Compared with last year, condo resales are up 42 per cent in the city and surrounding suburbs.

TRREB said there is more demand for condos with Canada’s immigration rising and more first-time homebuyers trying to get into the market.

“The condo and townhouse segments, with lower price points on average, will remain popular as population growth picks up over the next two years,” TRREB‘s chief market analyst, Jason Mercer, said in a news release.

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