‘Frustrated’ buyers left out in cold as Toronto home prices soar up to 32%

TheGlobeAndMail.com
Dec. 2, 2016
Michael Babad

“Frustrated” would-be home buyers are increasingly being left out in the cold as the Toronto housing market surges ever higher.

Fresh statistics from the Toronto Real Estate Board tell an eyebrow-raising story:

Active listings in the Toronto area plunged by almost 36 per cent in November from a year earlier as the supply drought continued, though new listings were actually up more than 10 per cent.

The average home price climbed 22.7 per cent to $776,684, though that number is almost meaningless as much depends on area and type of home. The MLS home price index, which is seen as a better measure, surged 20.3 per cent.

Here’s the real eye-popper: The average price of a detached home in Toronto’s 416 region soared 32.3 per cent to almost $1.35-million.

But the areas surrounding the city core had their own story to tell: The cost of an average detached home in the 905 region surged 25.5 per cent to $757,517, while prices in the even further but nearby communities also chalked up impressive gains.

All in all, sales across the area climbed 16.5 per cent, to 8,547 from 7,337, for a total value of $6.6-billion.

This comes as the focus in Canada shifts to Toronto, given the rapid cooling in Vancouver driven by policy measures at the federal and provincial levels.

The federal government recently introduced new mortgage and tax measures on markets across the country, while British Columbia slapped a 15-per-cent tax on foreign buyers of Vancouver-area properties.

The new Toronto numbers are certain to raise not only eyebrows but also further speculation that foreign buyers are shifting to Canada’s biggest city in the wake of the B.C. tax.

“Many would-be home buyers continued to be frustrated by the lack of listings, as annual sales growth once again outstripped growth in new listings,” Lary Cerqua, president of the Toronto realtors group, said in a statement accompanying the November statistics.

The Toronto board, like some analysts, suggested that the answer lies in the supply drought.

“Recent policy initiatives seeking to address strong home price growth have focused on demand,” said Jason Mercer, the director of market analysis.

“Going forward, more emphasis needs to be placed on solutions to alleviate the lack of inventory for all home types, especially in the low-rise market segments.”

Aside from the strong showing in detached houses, sales of semi-detached homes in the Toronto area rose 20.3 per cent last month, those of townhouses 15.2 per cent, and those of condos 25.8 per cent. Average prices rose 19.8 per cent, 23.7 per cent and 15.1 per cent, respectively.

Analysts believe the Toronto market will ease in time amid the policy measures and the fact that houses are increasingly becoming out of reach for many potential buyers.