Photo: Jay Woodworth/Flickr
Home prices in Toronto have climbed higher and higher over the last few years, but numbers released Wednesday from the Canadian Real Association (CREA) show just how fast the acceleration has been.
The MLS Home Price Index for the GTA reached $557,900 in June 2015. This was an 8.94 per cent increase over the same time last year. Torontonians may no longer be shocked about year-over-year price increases of this size, but consider this: the Home Price Index in the GTA was also up 38.38 per cent from five years ago.
It was the biggest such increase measured by CREA, beating out Greater Vancouver, which recorded an increase of 20.58 per cent in five years and Calgary, which saw the index rise at a rate of 18.21 per cent.
The majority of regions studied by CREA saw a five-year increase. Two areas in British Columbia, Victoria and Vancouver Island, bucked the trend and saw decreases of 3.93 per cent and 0.32 per cent, respectively.
Compared to average sale prices, the Home Price Index is seen as a clearer indication of how markets change since, unlike averages, it isn’t impacted by changes in the mix of sales activity.
Gregory Klump, CREA’s Chief Economist, noted that recent price growth in the GTA was largely due to a listings shortage in the region. The sales-to-new-listings ratio in the GTA in June was 65.4 per cent, and since a ratio between 40 to 60 per cent is generally seen as a balanced market, Toronto is clearly in seller’s market territory.
Other regions had even tighter conditions than the GTA in June. Hamilton recorded a sales-to-new listings ratio of 83.5 per cent while Greater Vancouver saw a ratio of 71.6 per cent.
Regions that saw the sales-to-new-listings ratio dip below 40 per cent in June for buyer’s market conditions include the Gatineau Census Metropolitan Area (CMA), the Saguenay CMA, Halifax-Dartmouth and Saint John. CREA considers the Canada-wide market to be balanced, with a ratio of 57.2 per cent.