Toronto Real Estate Prices Will Continue Rising
Toronto real estate has emerged out of any residual slump from 2018 and 2019, and with the Bank of Canada rumoured to drop its benchmark interest rate tomorrow, housing activity in the region is expected to heat up even more. A lower cost of borrowing should trigger increased demand in the housing market and continued rising house prices, as the region’s already-severe inventory shortage persists.
Lower Interest Rate & Low Inventory a Recipe for Further Price Growth
“Toronto real estate is extremely active, and we expect a busy spring housing market ahead. A cut in interest rates, in an effort to boost the global economy, will only add fuel to Toronto’s already-hot housing market,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada.
Despite mounting concerns about the spread of coronavirus and its impact on the world economy, Toronto has not yet experienced any negative effects on the local housing market. Homebuyers are more concerned about rising prices in Toronto, and about getting their foot in the door while they still can.
Toronto Real Estate Prices & Inventory
In January 2020, the Toronto Regional Real Estate Board reported a 12.3-per-cent price increase in the Greater Toronto Area. The average selling price in the GTA was $839,363 (compared to $747,175 in January 2019). In Toronto proper, the average price was $884,385.
Toronto’s continuing price growth is thanks to a lack of inventory, which is prompting competition among homebuyers and many multiple-offer scenarios. TRREB reported 4,581 transactions in the GTA in January 2020 – a 15.4-per-cent increase year-over-year. Comparing month-over-month figures, sales rose by 4.8 per cent. Meanwhile, new listings were down 17.1 per cent and overall active listings were down 35 per cent.
As sales increase and listing fall, Toronto’s price growth in expected to continue. “We won’t see significant change until inventory levels are addressed in hot markets like Toronto,” Alexander says. “We need to continue to push for housing affordability, as well as an increase in housing supply for buyers and renters, but we have yet to see a comprehensive national housing strategy to help facilitate this shift.”
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