TORONTO – Housing sales in the Toronto area continued to soar last month, with the average price rising 20.4 per cent from September last year to $755,755, the Toronto Real Estate Board reported Wednesday.
The new data came as the number of transactions in the Greater Toronto Area rose 21.5 per cent, a stark contrast to a big drop in the number of transactions in the same month in Vancouver’s residential real estate market.
The real estate board said Wednesday there was strong growth in sales transactions for all major home types in the Toronto area but a lack of supply limited growth in the city of Toronto proper — also known as the 416 by the real estate board.
By comparison, figures released Tuesday by Vancouver’s real estate board showed a 32.6 per cent drop in sales transactions compared with September 2015 — prior to a new 15 per cent provincial tax on foreign buyers that came into effect in August.
Vancouver prices continued to rise but some analysts expect a prolonged decline in demand will lower the sky-high cost of housing in Canada’s most expensive real estate market.
There’s also been anecdotal evidence that some foreign buyers have shifted their focus from Vancouver to other cities, including Toronto.
On Monday, the federal government unveiled measures to tighten various rules for prospective buyers and lenders across the country.
“While these changes are pointed at the demand for ownership housing, it is important to note that much of the upward pressure on home prices in the GTA has been based on the declining inventory of homes available for sale,” Jason Mercer, the board’s director of market analysis, said in a statement Wednesday.
He said in an interview that it’s too soon to tell how the latest changes to federal rules will affect the Toronto market, noting that some past interventions have had minimal to no effect, although a 2012 change in rules did slow demand for several months.
The real estate board’s benchmark price index was up 18 per cent from September 2015, after adjusting to various types of housing.
The average sale price for detached houses in Toronto proper rose to $1.29 million, up 23 per cent from a year earlier. The comparable price for detached houses in surrounding areas was $928,414, up 26.6 per cent.
By contrast, prices for condos in Toronto proper grew only 6.5 per cent to $446,294. Condo prices in other parts of the Greater Toronto Area were up 19.4 per cent to $367,260.
Mercer said extensive condo building in Toronto has brought supply closer to demand, but availability remains tight.
Finance Minister Bill Morneau declined to say at a Toronto news conference whether the latest changes he’s announced are aimed specifically at foreign purchasers.
He did note that tax exemptions on capital gains from rising property prices would require that the buyer was residing in Canada at the time of the purchase and actually lived in the property, closing a potential loophole that could be abused by speculators from outside the country.
Note to readers: This is a corrected story. An earlier version said the average condo price in the City of Toronto was $446,729.