- TD raises home price forecast for Toronto
- ‘If you have to ask, you can't afford it’
- Britain pulls the Brexit trigger
- Westinghouse files for court protection
- EU regulators block Deutsche Boerse, LSE deal
TD forecast for rise in Toronto home prices
How high could Toronto house prices go?
To borrow a phrase oft attributed to J.P. Morgan: If you have to ask, you can't afford it.*
Of course, if you're lucky enough to already own a home in the Greater Toronto Area, then you definitely want to ask.
In upgrading their forecasts, Toronto-Dominion Bank economists expect Ontario house prices to surge again this year, largely on the strength of the GTA, with the pace then slowing markedly.
The average resale price in the province is now projected to jump 15.3 per cent to $613,000 this year, and 1.6 per cent to $622,900 in 2018.
(You might be able to tell J.P. you could indeed afford that, but hold the thought.)
“Ontario’s housing market is still red hot and likely has further room to run,” said TD chief economist Beata Caranci, senior economist Michael Dolega and economist Dina Ignjatovic.
“The market remains extremely tight – in the Toronto region especially, but also throughout most of the province – with a number of cities sitting well in seller’s territory,” they added in a study of Canada's provinces this week.
“In the near term, there appears to be little to slow the market meaningfully, leading us to upgrade our forecasts for home prices, building activity and service sector activity from our December projection.”
Of course, those Ontario prices can't hold a candle to Toronto. Nor can prices in some of the surrounding regions hold a candle to the city core.
The latest report from the Toronto Real Estate Board put the average price of a detached home in February at $1.2-million, and that of a semi at $826,359.
Broken down, the average for a detached in the core 416 area code is almost $1.6-million, and a semi about $1.1-million.
In the surrounding 905 area code, the numbers are $1.1-million and $712,276, respectively.
(Yes, J.P., we could probably still afford a condo: $515,424 and $404,460.)
Mr. Morgan would no doubt enjoy the new TD projections for the GTA alone, which is, after all, an asset price:
“In light of recent developments, TD Economics has upgraded its GTA housing price growth forecast for 2017 to range between 20 per cent to 25 per cent,” said Ms. Caranci, TD economist Diana Petramala and economic analyst Katherine Judge.
“The lower end requires prices to remain stable over the rest of the year,” they added in a separate report.
“However, evidence is building that speculative forces are growing deeper roots, which raises the risk that prices will move closer to the top end of that forecast in the absence of policy measures. We look for the effects of higher mortgage rates and eroding affordability to ‘cool’ the GTA market in 2018, but here too we would not be surprised to see an overshoot.”
Ontario Finance Minister Charles Sousa said earlier in the week he is looking at housing measures in his next budget.
*The comment attributed to John Pierpont Morgan, supposedly to a banker about a yacht, comes in different forms. And some observers doubt he ever said it.
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