Toronto home sales and prices reached new highs in March, blowing past the previous record set during the 2016 real estate boom, with the city’s condo rebound gaining steam and demand continuing for houses in the city and nearby suburbs.
There were 15,652 home resales last month, according to the Toronto Regional Real Estate Board (TRREB). That was nearly double the volume of March, 2020, when initial pandemic measures halted open houses and abruptly depressed sales and prices.
Last month surpassed the previous record set in May, 2016, when there were 12,870 resales and the frenetic activity pushed federal and provincial governments to enact measures to slow the market down.
With buyers continuing to take advantage of low mortgage rates and desperate for more space, TRREB’s chief market analyst Jason Mercer predicted that prices would continue to rise.
Last month, the average selling price across the Toronto region reached a record $1,097,565. That was 22 per cent higher than March of last year and 5 per cent higher than February. The home price index, which corrects for expensive transactions and sales volatility, also hit a record $1,007,600 last month. That was 17 per cent higher than March of last year and 4 per cent higher than February.
Throughout the pandemic, demand has far outpaced the number of new listings. Although more homeowners put their houses up for sale compared with March, 2020, total active listings are still below last year’s.
“The potential for double-digit price growth could continue without a meaningful increase in the supply of homes available for sale,” Mr. Mercer said in a press release, adding that this will become more apparent when the city’s population growth resumes over the next year. (More people are expected to flock to Toronto once the borders open up.)
Demand for condos, as well as rents, dropped last year after condo renters lost jobs and owners sought more space outside of the city. But March sales were nearly double last year, and the average selling price for a condo in the city increased for the second consecutive month to $707,835. The average sale price is now down incrementally year over year after being down as much as 8 per cent in the 12 months to January.
“It keeps on picking up and picking up and picking up,” said Davelle Morrison, a broker with Bosley Real Estate Ltd., who is looking for condos for an assortment of clients, including for postsecondary students and people relocating to Toronto for work.
Now, runaway house prices in the Toronto region, small Ontario towns and the Maritimes have prompted economists from two major Canadian banks to call for measures to cool the market. Canada Mortgage and Housing Corp. recently added Toronto, Ottawa and Halifax to its list of vulnerable, overheated housing markets that already includes Moncton and Hamilton.
RBC’s Robert Hogue has said policy-makers should put everything on the table, including unpopular ideas like taxing capital gains on the sale of principal residences. BMO’s Robert Kavcic has urged policy-makers to act before it is too late, suggesting that a more transparent bidding process would help slow the price acceleration.
Toronto-Dominion Bank chief executive officer Bharat Masrani also recently warned against taxing capital gains on the sale of principal residences. TRREB CEO John DiMichele also pushed back against tax changes, saying it is “fraught with unintended consequences” and could further stifle the supply of listings.
The Toronto results come after similar gains in the Vancouver region, with competition for detached houses pushing prices higher in the country’s most expensive market.
The price index for a typical home in the region reached $1,123,300, which was 9 per cent higher than March of last year when home prices had just started to rebound after a dip caused by foreign-buyers taxes and stricter mortgage rules.
Home resales more than doubled in March, with sales nearly tripling in suburban and semi-rural areas such as Whistler and Squamish. Although more homeowners in the Vancouver region put their properties up for sale, listings were still below the 10-year average.
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