Toronto’s mayor is putting the real estate industry on notice after the city’s real estate board registered another month of scorching price growth.
“I would hope we would have our provincial government partners look at the real estate industry and just ensure that their practices are not encouraging an even more frenzied marketplace that makes it harder for people to acquire homes at any kind of cost that is reasonable at all,” John Tory told reporters on Wednesday.
The latest Toronto Real Estate Board data showed the average selling price in March surged 33.2 per cent year-over-year to reach $916,567. That marked an acceleration in price growth after the 27.7 per cent year-over-year rise in February that sparked a renewed wave of concerns about housing affordability across the Greater Toronto Area.
TREB told BNN the price growth in March was the fastest since 1989.
The average selling price of a detached property in the city of Toronto hit $1,561,780 in March — 32.8 per cent more than a year earlier. The total value of all home sales in the month was $11.1 billion.
“It’s deeply concerning to me because not only are people losing hope of having a home – a rental or an ownership home, but they’re losing even just the mathematical ability to contemplate what they hope for,” Tory said. “The dream of home ownership has to be kept alive.”
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The price growth in March came amid a double-digit rise in home sales. 12,077 properties traded hands in the month, nearly 18 per cent more than in March 2016.
“Demand is nearly insatiable,” BMO Capital Markets Chief Economist Doug Porter told BNN via email. “Policymakers simply have to take steps to cool demand, with some haste. … We are now approaching the rarified air Vancouver was in a year ago.”
The strongest sales growth last month across all property types was seen in the condo market with a 29.0 per cent surge in sales in the city of Toronto.
“It has been encouraging to see that policymakers have not implemented any knee-jerk policies regarding the GTA housing market," said TREB President Larry Cerqua in a statement. "Policymakers must remember that it is the interplay between the demand for and supply of listings that influences price growth."
On the supply front, new listings rose 15.2 per cent in March from the previous year, but the total inventory of active listings plummeted 35.2 per cent.
“I suspect many folks are being offered prices they never thought they would get in their wildest dreams and are cashing in,” Porter added. “Some may be influenced by bubble talk, but I believe most people respond to their own circumstances and the incentives that are staring them in the face.”