The average sale price of detached homes in the Greater Toronto Area continued to soar last month, hitting a new record high as prices climbed in suburban communities surrounding Toronto.
The Toronto Real Estate Board (TREB) reported Wednesday that the average detached house in the GTA sold for $1,214,422 last month, up 33.4 per cent from $910,375 in March last year.
Coming weeks before Ontario is expected to unveil its spring budget, the March sales numbers will almost certainly add fuel to calls for the province to announce measures to cool the overheated Toronto market.
Bank of Montreal economist Robert Kavcic said the market "remains drum tight" and said price growth rates are pushing close to the heights Vancouver saw last year before a new tax on foreign buyers helped cool the market.
"At this rate, every week that policy makers wait is another week closer to 1989," Mr. Kavcic said, referring to the last time Toronto saw a major correction in its real estate market.
However, TREB president Larry Cerqua urged the province not to "implement any knee-jerk policies" and to continue consulting with market stakeholders before acting. TREB has previously rejected proposals for a tax on foreign buyers, and has urged governments to focus on measures that will help encourage construction of new homes.
"Policy makers must remember that it is the interplay between the demand for and supply of listings that influences price growth," Mr. Cerqua said in a release.
The average $1,214,422 sale price for a detached house in the GTA in March edged slightly above the prior record value of $1,205,815 set in February this year as the selling price of homes in communities surrounding Toronto – known as the 905 region for their telephone area code – continued to climb.
In the 905 area, detached homes sold for an average of $1,124,088 last month, up 34 per cent from March a year ago but also up 1.6 per cent over February this year.
In the City of Toronto, however, the average detached home price fell by 0.75 per cent in March compared with February, averaging $1,561,780 compared with $1,573,622 a month earlier. The price was still up almost 33 per cent from March a year earlier, however, when detached homes sold for an average of $1,174,358 in the city.
The sale price of all homes in the GTA – including semi-detached homes, townhouses and condominiums – climbed to an average of $916,567 in March, a 33-per-cent increase from $688,011 in March, 2016.
Condo prices climbed significantly in March compared with February, far outstripping the rate of increase in detached house prices over the month. Condo sales in the GTA averaged $518,879 in March, up 7.8 per cent from February and up 33 per cent from March a year ago.
The good news for those hoping for more equilibrium in the Toronto market was that the number of homes sold in March climbed by 17.7 per cent and the number of new listings in the month climbed by 15.2 per cent. However, active listings – or the number of homes available for sale – continues to lag 2016 levels, with 7,865 homes actively listed, down 35 per cent from 12,132 homes in March last year.
Jason Mercer, TREB's director of market analysis, said the GTA market would need "a substantial period of months" in which the growth of new listings outstripped sales "to bring the GTA housing market back into balance."
Sal Guatieri, an economist at Bank of Montreal, said it is notable that prices climbed steadily in all areas of the market, including condos, and in regions farther from central Toronto – including Georgina and Innisfil. He said it is a sign of "the rapid deterioration in affordability across the region."
"As much as long-time owners are loving it, this might not end well when economic conditions are less favourable than they are today," he said.