Any lingering concerns that the mortgage stress test and new taxes put the Toronto housing market into a deep sleep can now be laid to rest, says the Toronto Regional Real Estate Board (TRREB).
Instead, the board is predicting a double-digit climb in sales and prices this year that will boost the average cost of a resale home up nearly 10 per cent to $900,000 compared to last year’s average of $819,319.
Last year saw a 12 per cent growth in the average home price compared to 2018 and the board is warning that in the year ahead, buyers are going to face increased competition for a flat or declining number of listings.
“It’s an issue because 10 per cent price growth year over year isn’t sustainable,” said Jason Mercer, the real estate board’s chief market analyst.
“It’s also clear that niggling around the edges with policies like we’ve seen in 2017 and 2018 is only a temporary fix. We have a regional economy that continues to attract people from all over the world and they need a place to live.
“So the demand over the long term for ownership housing is going to remain strong,” Mercer told a banquet hall of real estate industry professionals at the board’s annual economic summit where it releases its Market Year in Review and 2020 Outlook report. “We need to start moving toward policies that are bringing more supply online.”
Mercer told the crowd that “last year’s (average) price of $820,000 is almost back to the peak that we hit in 2016 and 2017. Certainly as we move forward we’ll be setting new records as we move into 2020.”
The sales growth reflects a trend to less expensive home types — condos and lowrise formats such as semi-detached and townhouses. But if the action accelerates in the detached housing segment, which showed a marked recovery last year, this year’s price average will be even closer to the $1 million mark, said the board.