Toronto home prices roar back from lows as demand surges
Toronto home prices surged in February, and sales jumped from a 10-year low, as buyers stampeded back into the market.
The benchmark price climbed 10.2% in February to C$846,100 ($632,550), the Toronto Regional Real Estate Board said Wednesday. The index gained 2.2% from January, the biggest increase since April 2017. Most segments posted almost double-digit price growth with condos rising about 12% over the year, the board said.
The number of transactions jumped 46% from February 2019, which was a 10-year sales low as the market struggled with tougher mortgage rules and higher interest rates. The opposite is happening this year, with mortgage rates declining as bond yields drop amid the coronavirus and the Bank of Canada expected to cut interest rates on Wednesday.
February sales were up by about 15% compared to January.
"Sales growth will be strong this year," board President Michael Collins said in a statement. However, the annual pace of sales will likely slow as stronger sales came into effect after the first quarter of 2019.
The average sale price for a detached home in central Toronto was C$1,184,800 in February, up 8.1% from a year earlier. Condo prices rose 11% to C$609,200 on average downtown.
New listings rose 7.9% to 10,613 in February from a year ago, not enough to meet demand meaning market conditions tightened considerably over the past year, TRREB said.
"Sales growth well in excess of listings growth is once again the norm," the board's Chief Executive Officer John DiMichele said.
The regional real estate board’s current average forecast is for 10% price growth to C$900,000 in 2020, noting that while the outlook represents "a very robust pace of growth" it's possible that further tightening with detached homes could push overall average selling price above its baseline scenario, the board said.