The average price for a single family home in Toronto was $521,300 that month, according to the index published by the Canadian Real Estate Association. The figure includes semi-detached and detached homes.
Across Canada, real estate prices rose a more moderate 5.2 per cent, the MLS Home Price Index showed. The index tracks so-called “benchmark” homes in five major markets, an indicator that strips out variations in the types of housing sold from one month to the next.
For the overall index, the gain was similar to the previous two months and among the smallest since last August as tighter mortgage rules came into effect.
However, the housing market continues to diverge with Toronto speeding ahead while Vancouver cools off, the report showed.
The Greater Toronto Area saw the biggest price increase, up 7.9 per cent, while Vancouver rose just 3.7 per cent, the index showed.
“Canadian home price gains are generally expected to moderate, but there are a few hot spots where prices are being fuelled by some very strong housing market fundamentals,” association president Wayne Moen said in a statement.
Toronto has less than two months’ supply of housing compared to six months’ average supply nationally, he noted “so it ranks among the tightest of Canadian housing markets.”
It was the second month prices rose in Toronto as a shortage of inventory favoured sellers, particularly in the single family detached category while the condo market remains reasonably balanced.
The Toronto Real Estate Board blames the land transfer tax for dampening sales of single family homes in Toronto. But the board also said very low interest rates may have pulled some home purchases forward during the three-year period before the 2008 recession.
“A lot of people purchased homes that otherwise might have been spread out over time. They’re not ready to move up again,” said Jason Mercer, senior market analyst for the Toronto board. “I’d also argue that in the (city of Toronto), the land transfer tax has played a role. It represents a substantial up front cost. You might decide to borrow to renovate the home you’re in rather than list it for sale.”
Despite the price gains, Mercer says housing in Toronto remains affordable, as very low interest rates have kept the cost of financing a home within most buyers’ reach. The average household is paying between 30 and 35 per cent of combined income on mortgage, property tax and utilities, he said, adding that’s well within generally accepted guidelines.
Year-over-year price gains accelerated in Toronto and Calgary (up 4 per cent) and rose moderately in Montreal (up 2.3 per cent), the MLS index showed.
In all five markets, single family homes posted the biggest gains, up 6.4 per cent, followed by townhouses, up 3.6 per cent, and apartments (which includes condos), up 2.7 per cent
“Just as there are some pretty clear differences emerging across markets right now, there have also been some interesting developments in price trends across housing types,” said the association’s chief economist Gregory Klump.
In the Greater Toronto Area, the average price of a townhouse in April was $319,100 and for apartments, which include condos, it was $293,600, according to the MLS index.
The overall index for all five major markets in the survey is up 55 per cent since to 154.7 points since June 2005.
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