toronto housing Photo: Hailey Toft/Flickr

High demand and insufficient inventory drove up prices for centrally located detached homes in Toronto in the first quarter of 2014, according to a new report by Royal LePage.

The real estate franchiser, which published its First Quarter Royal LePage House Price Survey on Tuesday, said sale prices for two-storey homes rose 6.8 per cent to $716,698 over the first quarter of 2013 while detached bungalows rose 4.1 per cent to $589,250. Standard condominiums posted a less impressive increase of 1.5 per cent with the average sale price rising to $364,979.

In a press release accompanying the new survey, Gino Romanese, Senior Vice President at Royal LePage, said that along with insufficient inventory, demographic factors such as members of the “Echo generation” looking to buy their first detached home, are impacting the market.

“Multiple-offers are nothing new in recent history when it comes to quality family homes in this city, and the last quarter was no exception,” said Romanese. “However, with the weather now taking a turn for the better, we are starting to see more listings roll in, with a more fulsome surge of inventory expected after the Easter weekend, which should be most welcome news for buyers.”

On the condominium front, Royal LePage believes that the market is continuing “to hold its own” with Romanese commenting that specific price trends and activity levels vary at a neighbourhood-level.

On the national level, the sale price of a two-storey home was 5.4 per cent to $428,943 detached bungalows rose 4.4 per cent year-over-year to $380,765. Mirroring the Toronto market, the average sale price for standard condominiums posted a more modest increase, climbing 2.5 per cent to $252,174.

“With the slightest trace of a weather recovery in most parts of the country, we are now finally seeing the arrival of housing inventory. This, combined with pent-up demand following a particularly long and harsh winter is setting the stage for an exceptionally robust spring 2014 market,” said Phil Soper, President, Royal LePage. “This is good news for buyers, as the price spikes we have seen in a number of cities will be alleviated by this additional supply.”

Using Royal LePage’s reports from Q1 2010 onward, we put together this chart to show how sale prices have changed over the last five years:

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