Toronto area home prices could still end the year 10 per cent above last year’s if the current real estate trajectory holds, according to the Toronto Regional Real Estate Board (TRREB).
The average price of a home in the region hit $931,000 in June, a new all-time high that surpassed the previous April 2017 market peak of $920,791. Home prices have held steady since the pandemic lockdown in March largely because, as the number of buyers dwindled, so did new listings, said TRREB on Tuesday.
In February, the real estate board was forecasting a 10 per cent price gain with the average price of a re-sale home — including all re-sale condos, detached, semi-detached and townhouses — reaching $930,000 by year’s end.
That’s still possible, said TRREB. But the board cautioned that a resurgence of the virus in Canada or the U.S. that erodes employment and trade, could produce a less rosy outcome.
The average price this year to date is $891,167.
The Toronto board’s forecast is at odds with Canada Mortgage and Housing Corp., which predicted that Toronto home prices would drop 7 to 18 per cent below average price of $892,238. It expected prices to return to those levels in the last half of 2022.
Re-sale home transactions rose 89 per cent in June compared to May — but only 1.4 per cent year over year. While new listings were up 2.1 per cent compared to 2019, the number of active listings plunged 28.8 per cent.
The board now says that its February forecast of 97,000 sales this year likely isn’t attainable. But if the seasonal pattern holds for the second half of the year, 80,000 sales is “a realistic target.” There have been about 36,000 sales this year to date.
“A gradually improving labour market and historically low mortgage rates are expected to support a recovery in home sales in the second half of 2020 along with sustained year-over-year price growth,” said chief market analyst Jason Mercer.
The real estate board reported the strongest annual price growth in the detached and semi-detached home categories in the city of Toronto, where prices rose 14.3 per cent to $1.52 million and 22 per cent to $1.29 million, respectively.
Detached house prices climbed to an average of about $1.03 million — 11.7 per cent — in the 905-area communities outside Toronto and semis gained 8.6 per cent, selling for an average of about $730,000.
Condos saw less dramatic price growth of 9.1 per cent in the 905 areas to $528,000 on average and 5.6 per cent in Toronto, where they averaged about $672,000.
An Ipsos survey for the real estate board in late May found that home-buying intentions weren’t much different this year compared to last. Twenty-seven per cent of respondents said they were likely to purchase a home this year, compared to 31 per cent last year. But only 21 per cent of home owners indicated they would likely list this year. That compares to 32 per cent who said they would list in 2019. The survey results are considered accurate within 3.9 per cent.
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