Toronto home activity soared in February compared with last year, with buyers pushing up the average residential sale price as they competed for houses in a market with scant supply.
Home sales in the Greater Toronto Area reached 7,256 last month, according to the Toronto Regional Real Estate Board, a 46-per-cent increase over February last year, when activity hit a decade low because of stricter mortgage rules and the foreign buyers tax.
February’s sales growth was the 11th consecutive month of year-over-year percentage increases, and occurred as fewer homes were listed for sale. The low supply made it harder for buyers to find a home and prompted another month of hectic activity with properties receiving multiple offers above the asking price.
“We are seeing it non-stop,” said Shawn Zigelstein, sales representative with Royal LePage Your Community Realty. One of his clients received multiple over-asking offers on his detached house in Markham before it was officially on the market. The house sold for $1,505,000. The asking price was $1,349,888.
The real estate board said “sales growth well in excess of listings growth is once again the norm," which is driving up home prices.
The average selling price of a home jumped 17 per cent to $910,290 last month from $779,791 a year ago.
There were double-digit percentage increases across all types of homes in the city of Toronto and the neighbouring suburbs, with the biggest growth in the condo market.
In the city, the average selling price of a condo rose 18 per cent to $722,675 and in the suburbs the average selling price climbed 19 per cent to $534,688. Meanwhile, the average selling price of a detached house in the city increased 14 per cent to $1,485,304, while in the suburbs the average value climbed 14 per cent to $1,017,573.
The real estate board said the temporary effects from tougher housing rules “have largely worn off.” It is predicting strong sales growth this year, a 10.5-per-cent increase over 2019.
Toronto’s housing market, the largest in the country, slowed briefly in 2018 from the implementation of the mortgage stress test requiring borrowers to qualify at a higher rate than they would pay, and as the Bank of Canada raised interest rates.
But some of those policies are changing and could make it easier for borrowers to get a bigger mortgage, which would further juice the market.
The federal government has tweaked the test for insured mortgages to make it more responsive to market rates, which are easing. The banking regulator is expected to follow suit for borrowers that don’t require mortgage insurance. The Canadian central bank is under pressure to cut interest rates.