Strong prices, more listings
At the midway point in the year, the number of new listings has finally started to increase. Throughout the spring months, agents observed that there were never that many homes to show at a given time. Bidding wars were prevalent, and prices increased steadily through May (see chart). In June 2011, there were 10,230 home sales on MLS, up 21% over the previous June.
“While sales have been strong, we would be on track for a record number of transactions in 2011 if not for the decline in listings so far this year,” said Jason Mercer, the Toronto Real Estate Board’s Senior Manager of Market Analysis. “Tight supply meant more competition between home buyers and an accelerating annual rate of price growth in the second quarter.”
In fact, the rate of annual price growth for homes in the Toronto area in 2011 stands just below 8%. Over the past 15 years, the average yearly growth in prices has been around 5.8%. Individual neighbourhoods appreciate at different rates, depending on the local trends of demographics and growth.
Why neighbourhood prices grow at different rates
House prices in the downtown Annex and adjoining Seaton Village and Dovercourt areas have gone up an average of 10% annually over the last decade. Houses in nearby Rosedale and Moore Park, by contrast, went up only 7% annually over the same period. Further north, in the “inner suburb” Don Mills area, house prices have risen almost 8% annually in the last decade, fuelled by a dramatic 30% price rise in the last 18 months.
One trend that’s visible in the recent sales figures is the increasing popularity of downtown living. Houses in old downtown areas are showing the most dramatic price increases, growing faster than prices in more traditional prestige areas.
This is a major shift in values, which marks a change in how Toronto’s population is choosing to live. Areas in the central city that used to be working-class and immigrant-settlement areas are sought after by young professional families. The famous gentrification that swept Cabbagetown in the 1970s is now taking place throughout wide swaths of east and west Toronto, from Victoria Park to the Humber, and beyond.
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