The Toronto region housing market is getting tighter as homebuyer demand ramps up and supply continues to slip.
These conditions, which emerged last year following a months-long slump, have kept up into the new year and are now pushing prices up at the fastest rate in over two years.
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The recently rebranded Toronto Region Real Estate Board (TRREB) announced today that the benchmark price of a home in the region was up 8.7 percent in January, the highest annual growth rate seen since October 2017. The condo resale market led the way in price growth, but all property types saw strong growth above 7 percent when compared to year-ago levels.
TRREB’s market analysis team’s commentary can be summed up in one statement: What a difference a year makes.
“It is clear that many buyers who were on the sidelines due to the OSFI stress test are moving back into the market, driving very strong year-over-year sales growth in the detached segment. Strong sales up against a constrained supply continues to result in an accelerating rate of price growth,” said Jason Mercer, TRREB’s Director of Market Analysis and Service Channels, in a media release.
Beyond homebuyers adjusting to the stricter mortgage stress tests, TRREB’s team chalked up the strong showing to solid market fundamentals, including low unemployment, population growth and favourable mortgage rates.
The Toronto region’s 4,581 home sales in January were up over 15 percent compared to a year ago. Sales last month also rose 4.8 percent over December 2019’s total.
We can anticipate more of the same for 2020, with interest rates remaining steady (or potentially dropping) and the federal government expected to introduce more financial support for first-time homebuyers.