Home Listings shortage drives up prices
Real estate sales in the GTA continued at a blistering pace in April. An all-time record for the month was set with 12,085 transactions, up 7.4 per cent from April 2015. However, the demand for detached homes still far exceeds the supply of homes listed for sale. Detached and semi-detached home sales actually fell from last year, in the City of Toronto. Bidding wars among buyers are driving up prices. “As we move into the busiest time of the year in terms of sales volume, strong competition between buyers will continue to push home prices higher,”says Jason Mercer, the Toronto Real Estate Board’s director of market analysis. In April, the average selling price for a detached home in the city was $1,257,958, an increase of 18.9 per cent from last April.
In the 905 regions, the average detached home sold for $881,413 up 20.7 per cent. Detached GTA homes spent an average of 13 days on the market and sold for 104 per cent of the listed price in April. Several factors continue to stoke the real estate furnace in the GTA. Active listings were down by 26.9 for all types of property, creating heightened demand.
Low mortgage interest rates should continue well into next year. Immigrants keep flowing into the GTA, as well as people returning from Western Canada after job losses. There has been strong employment growth during the last twelve months. Demographics also favour the housing market as the echo generation – baby boomers’ children – are the prime age to buy real estate. Another factor, particularly in the luxury real estate market, is the controversial topic of foreign investment in real estate.
“Toronto is the most popular Canadian city for Chinese buyers, although I think sometimes Vancouver feels like it is the leader,” says Charles Pittar, CEO of Juwai.com, a Chinese international property portal. “The biggest motivation for buyers is the education of their children. They often combine the goal of providing a home for their children who are studying in Canada with other investment and lifestyle goals.”
The federal government has pledged to improve their tracking of the impact of foreign investment.