Home sales in Vancouver and Toronto jumped in November compared with last year, when prospective homebuyers were grappling with tougher mortgage rules and rising interest rates.
In the greater Vancouver area, sales soared 55 per cent to 2,498 homes, according to the Real Estate Board of Greater Vancouver, the fifth consecutive month of double-digit year-over-year increases. In the Toronto region, sales climbed 14 per cent to 7,090 homes, the Toronto Real Estate Board (TREB) reported, the eighth consecutive month of double-digit increases.
Sales activity started to rise in mid-year after a market lull that began in 2018, when Ottawa implemented the mortgage stress test, which requires home buyers to prove they can afford their home loans at a higher interest rate.
“We are definitely seeing a change from the first half of the year into the second half,” said Ashley Smith, president of Vancouver’s real estate board. “We are starting to see confidence back in the market.”
Earlier in the year, when activity hit a multiyear low, Ms. Smith said potential buyers were waiting to see if the market would continue to fall and were reluctant to jump in. But as sales increased for detached houses, townhouses and condos, buyers gained confidence and prices began to rise in some parts of the region, such as Burnaby and Port Coquitlam.
For the second consecutive month in the greater Vancouver area, the benchmark sale price for all types of housing increased slightly from the previous month. The November benchmark of $993,700 is higher than October’s $992,900, but 5 per cent lower than November, 2018.
“Certainly the decline in prices has slowed and, in some areas, we are starting to see a moderate increase in values,” Ms. Smith said.
Across the Greater Toronto Area, the benchmark home sale price was $843,637 in November, a 7-per-cent increase over the previous year, but slightly lower than October’s price of $852,221.
Prices increased for all types of housing, including detached houses and condos. In the city of Toronto, the average price of a detached house hit $1,360,246 last month, a 5 per cent increase over the previous year.
The real estate board said buyers were adjusting to the mortgage constraints and high Toronto prices by choosing to buy in a cheaper area such as the surrounding suburbs or opting for a smaller home.
“Based on affordability and stricter mortgage qualification standards, many buyers may have likely adjusted their preferences, changing the type and or location of home they ultimately chose to purchase,” TREB’s president, Michael Collins, said in a statement accompanying the results.
The suburbs, called the 905 for their telephone area code, recorded double-digit sale increases in detached houses and townhouses.
That sent prices higher, with the average selling price of a detached house in the 905 hitting $943,494 in November, a 4-per-cent increase over the previous year. The average price of a semi-detached house in the 905 was $703,272 last month, an increase of 7 per cent.
Burlington, which is about a one-hour train ride from downtown Toronto, recorded the highest rise in home prices across the region. Here, the average selling price of a detached house rose 18 per cent to $976,700, while a semi-detached house climbed 17 per cent to $746,800.
“Increased competition between buyers has resulted in an acceleration in price growth,” TREB’s chief market analyst, Jason Mercer, said in a statement. Mr. Mercer warned that prices would continue to rise due to the housing shortage in Greater Toronto Area.
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