Toronto House Prices Rise As Supply Dwindles, Prices Could Rise 5 percent in 2020, CMHC Report Says
The Toronto Real Estate Board (TREB) says home sales went up 14 percent in October 2019, compared with a year earlier even as prices rose. TREB says there were 8,491 sales in the Greater Toronto Area in October 2019, up from 7,448 sales in October 2018.
“A strong regional economy obviously fuels population growth. All of these new households need a place to live and many have the goal of purchasing a home,” TREB President Michael Collins said in a statement, quoted in The Huffington Post.
“The problem is that the supply of available listings is actually dropping, resulting in tighter market conditions and accelerating price growth.”
According to the report on Huffington Post, composite benchmark price went up by 5.8 percent in October 2019, for the strongest annual growth rate since December 2017, while the average selling price rose 5.5 percent to $852,142.
Detached home sales were up 19.6 percent with the average selling price up three percent to $1.05 million while condo sales rose 5.1 percent with the average selling price up 9.6 percent to $617,410.
As Toronto's population continues to increase, house prices continue to grow and the number of new listings in the month dropped by 9.6 percent to 13,050.
Jason Mercer, TREB’s chief market analyst, said he expects prices to accelerate even more “if sales growth continues to outpace listings growth, leading to more competition between home buyers.”
The rental rates are also being pushed up by a lack of housing supply. According to TREB, the average rent for a one-bedroom apartment was up 5.8 percent so far this year compared with last at $2,209, while rent for a two-bedroom apartment was up 4.7 percent to $2,888.
A report of The Star tells that Canada's national housing agency is forecasting Toronto region home prices to rebound in the next two years, rising as much as 5 percent in 2020 to an average of between $765,300 and $898,400
According to the annual Housing Market Outlook from Canada Mortgage and Housing Corp. (CMHC) released recently, the complex geopolitical landscape, including an upcoming U.S. election, trade wars and Brexit, are some of the conditions that are expected to keep interest rates low.
Dana Senagama, CMHC manager of market analysis for Ontario, quoted on The Star, says, “We can play around so much with demand but the supply is so low. Our population continues to increase by 100,000 on average every year. There’s a lot of people moving into this region. They need a place to live. The supply simply cannot keep up,” she said, adding that speaks to the economic prosperity of the region.
“We are already seeing demand for the more affordable types of homes like condo apartments and townhouses. That’s an area that has really picked up steam. I don’t think demand ever dissipated in Toronto but it has sort of shifted from the singles to the condos,” Senagama said.