Toronto’s housing market soared in September, another month where sales and prices hit record highs, with low mortgage rates enticing buyers despite the worsening coronavirus crisis.
Last month, 11,083 homes sold in the Toronto region, a 42-per-cent increase over September of last year, according to the Toronto Regional Real Estate Board (TRREB), with a notable surge in activity in the suburbs and regions surrounding the city of Toronto. That was the third straight month of record sales volumes.
Competition for detached and semi-detached houses helped send the average selling price across all types of properties up 14 per cent to $960,772, compared with the previous year. Prices have been climbing month over month since May, after the slowdown in April when non-essential activity was halted to stop the virus from spreading.
The home price index, which adjusts for the highest-price properties, also reached a record high of $897,700, an increase of 11.6 per cent over September of last year.
“The Greater Toronto Area is still white hot,” said Simeon Papailias, a realtor with Royal LePage Signature Realty, who said properties continue to fetch multiple offers and sell $50,000 to $100,000 over the asking price. “Money continues to be cheaper and cheaper,” he said.
Mortgage rates are at record lows, with the five-year fixed rate below 2 per cent. That has lowered monthly payments for mortgage holders, as well as made it easier for homeowners to pay down the principal debt on their homes.
More homeowners put their properties up for sale compared with September of last year, sending the overall number of active listings up slightly.
Despite the new listings, competition is fierce for low-rise properties, where there is more square footage and easier access to outdoor space. The regions surrounding the city of Toronto experienced the steepest price increases. North of the city, in the area close to Lake Simcoe, the home price index was up 20 per cent year over year. To the east in Durham region, the price index climbed 17 per cent and to the west in the Halton area, the index rose by 14 per cent.
Meanwhile, demand for condos in downtown Toronto has softened as the normal cohort of renters, including post-secondary students, shrinks because of the pandemic restrictions. One-bedroom rental rates have declined by at least 20 per cent since the start of the health crisis, according to local brokers. If the city continues to roll back the economic reopening and rental rates continue to weaken, Mr. Papailias said prices for condo resales would start to ease. “If this continues ... you will start to see pricing go down,” he said.
The average price of a condo in the city rose to $686,191, up 7 per cent from September last year. In comparison, sales of townhouses increased by 22 per cent, semi-detached houses were up by 49 per cent and detached properties were up by 28 per cent.
In the surrounding suburbs and regions, sales of detached houses were up 64 per cent, closely followed by other low-rise homes.
Meanwhile, the national housing agency has predicted the average selling price to fall between 9 per cent and 18 per cent, in the most dire pandemic scenario.
The Toronto region is dealing with a second wave of coronavirus cases and local medical officials are urging the province to further restrict activity. As well, some of the mortgage deferrals that were arranged earlier in the pandemic are expiring this month. The combination of pandemic restrictions, sustained unemployment and homeowners unable to make their debt payment could curtail Toronto’s surging residential real estate market.
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