Toronto housing prices accelerated in October as the persistent shortage of properties for sale continued to boost competition and push up values.
The Toronto Regional Real Estate Board, or TRREB, said their home price index for a typical home that adjusts for volatility rose 4 percent to $ 1,128,600 from September to October.
The index rose after rising 2 per cent. from August to September, marking the second consecutive month of increases since the spring. Housing values grew throughout the region, and the price index for the typical home in the suburb of Peel topped $ 1 million for the first time.
“Things are getting hotter again,” said Leah Zlatkin, a mortgage broker at Brite Mortgage, which works in the Toronto region. “People are still borrowing aggressively to buy homes.”
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There were 9,783 resale of homes in the Toronto area in October, with a jump in home sales offsetting the decline in home sales. It was the second month in a row with higher activity since March.
But fewer homeowners had their homes for sale last month, leading to a 13 percent drop from September to October. The volume of new listings is a third lower than last autumn.
“We’ve definitely seen the market tighten up since the summer,” said Jason Mercer, the board’s chief market analyst. With the ratio of sales to new ads continuing to rise, Mr. Mercer “it suggests more competition between buyers that could lead to an acceleration in price growth.”
The pandemic’s property boom has been driven by homebuyers’ desire for larger properties to handle the perpetual residency mandates.
But even though most pandemic restrictions have been lifted, homebuyers are still looking for more living space in the suburbs.
In Halton, just west of Toronto, the house price index rose 6 percent from September to October. Compared with a fall last year, the index has risen 32 per cent. In Durham, east of the city, and in Simcoe, to the north, the index has risen 35 percent year-on-year.
Brokers and mortgage brokers said they expect demand to continue as their clients try to take advantage of the record low mortgage rates.
Large banks have already started raising their fixed mortgage rates, and the Bank of Canada has suggested that it will raise the benchmark rate sooner than it had previously predicted.
“It makes them want to buy before. They want to enter the market and secure theirs [mortgage] price, ”said Michelle Plach, a real estate agent with Justo Brokerage.
Ms. Zlatkin, the mortgage broker, agreed. “People are getting the nervous feeling of taking the step now before interest rates change,” she said.
In the Vancouver area, the country’s most expensive real estate market, there was also a decline in new IPOs. It strengthened competition and prices, though not to the same extent as Toronto.
The Vancouver area’s house price index for detached and semi-detached houses rose 1.2 percent from September to October, according to the local board. The index for a detached house reached $ 1,850,500.
In Fraser Valley, the index for each type of property rose, with detached houses rising 2.5 percent to $ 1,396,700. That is 33 percent higher than in October last year. Resale in both regions was higher month-on-month.
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