Toronto realtors call for action on supply as home prices surge 17%

Realtors in Toronto are calling on all levels of government to address supply constraints as home prices in the city push even further into rarified territory and sales of seven-figure homes surged dramatically.

The average selling price for all homes in the Greater Toronto Area surged 16.8 per cent to $746,546 in June, according to data released Wednesday by the Toronto Real Estate Board.  However, that figure masks even more remarkable gains for the most sought-after properties: the average price for detached homes in the city of Toronto rose 19.6 per cent to $1,259,486.  

More than 2,000 homes in the GTA sold for more than $1 million during the month, marking a 65 per cent increase from June 2015. Growth in the number of homes that sold for more than $2 million surged even more dramatically, hitting 338 in June 2016 -- or 83 per cent above the year-ago period.

Once again, tight supply was a factor.  New listings dipped 3.8 per cent in the month – prompting TREB’s president to urge governments to take action.

“As the federal, provincial and local levels of government discuss housing policy in the coming months, issues affecting the lack of supply in the GTA should be of paramount importance,” said Larry Cerqua in a statement.

“TREB will be undertaking, and making public, results of additional research in the second half of 2016, with the goal of proactively adding to the housing policy discussion.”

Despite the overall dearth of new supply, GTA home sales rose 7.5 per cent in the month to 12,794 – led by the 4,816 detached properties that traded hands in the 905 area code (which encompasses cities including Mississauga, Brampton and Hamilton).

The booming price growth in Toronto comes hot on the heels of even greater gains in Vancouver.  The Real Estate Board of Greater Vancouver said on Tuesday the benchmark price for all properties sold in June jumped 32.1 per cent to $917,800. The benchmark for detached properties in that city surged 38.7 per cent to $1,561,500. 

The double-digit gains come shortly after federal Finance Minister Bill Morneau vowed to conduct a “deep dive” to help determine what’s driving the country’s hottest housing markets, and assess potential policy changes to safeguard the economy. 

On June 23, Morneau announced a new working group – comprised of officials from the governments of Canada, Ontario, B.C., Toronto and Vancouver – would present policy recommendations after meetings during the summer.