Almost $1.3-million: Home prices surge in Toronto as listings dry up

Theglobeandmail.com
May 4, 2016
By Michael Babad

Briefing highlights

• Toronto home prices surge as listings dwindle
• Stocks tumble across the globe
• Hoe to lose 2 cents in a day
• Video: How to say no to more work

Home prices surge

Toronto home prices surged in April as listings dried up, sparking a tumble in sales.

“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,” Jason Mercer, director of market analysis at the Toronto Real Estate Board, said today as the group released its April statistics.

“A greater supply of listings would certainly be welcome, but we would need to see a number of consecutive months in which listings growth outpaced sales growth before market conditions become more balanced.”

The average price for a detached home in the 416 area code is now almost $1.3-million, while in the outlying 905 area it’s more than $881,000.

That’s an increase of 19 per cent in the core and almost 21 per cent in the other regions.

Overall sales of detached homes fell 4 per cent in the 416 area, but surged more than 11 per cent in the 905.

Sales of semi-detached homes tumbled almost 11 per cent in the former, and rose just 2.8 per cent in the latter.

And here’s a crucial statistic: Active listings are now down by a sharp 26.9 per cent from a year ago, and new listings by almost 10 per cent.

“While April’s sales result represented a new record for sales, that number could have been even higher if we had benefitted from more supply,” said Mark McLean, the group’s president, putting the blame on taxes and fees.

“In the City of Toronto, in particular, some households have chosen not to list their home for sale because of the second substantial land transfer tax and associated administration fee,” he added.

“The lack of available inventory, coupled with record sales, continued to translate into robust annual rates of price growth.”

Across the Greater Toronto Area, the average home price climbed 16.2 per cent, while the MLS home price index, deemed a better measure, rose 12.6 per cent.

How to lose 2 cents

Stocks are tumbling again around the world this morning, and the Canadian dollar is down by almost 2 cents from the high it set just yesterday.

“A fairly choppy start to proceedings this morning, with miners dragging the FTSE lower and the dollar staging a small rebound in the face of the recent selloff,” said London Capital Group chief analyst Brenda Kelly.

Tokyo’s Nikkei was closed, while Hong Kong’s Hang Seng lost 0.7 per cent, and the Shanghai composite almost 0.1 per cent.

In Europe, London’s FTSE 100, Germany’s DAX and the Paris CAC 40 were down by between 0.7 and 1.3 per cent by about 6:20 a.m. ET.

New York futures were also down.

The loonie, which zoomed above 80 cents U.S. yesterday morning before a rapid decline, traded today between 78.26 cents and 78.75 cents.