March sales up 8%, prices up 10%
Each month, it’s been the same story… Home prices continue to rise across the Toronto market, while agents report a large number of buyers still looking for homes. The GTA’s monthly average sale price in March was $504,117.
In March, average resale home prices rose 10.5% compared to the same period in 2011. The supply of new listings has been steady, but not enough to prevent prices from rising above the historical range of close to 6% per year. “If competition between buyers remains as strong as it is right now, we will almost certainly see an average selling price above $500,000 for 2012 as a whole,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.
If you would like to sell your home in this spring market, email us, or call James and Joanne at 416-483-8000.
The long term picture
In the chart above, lower is better! The Affordability Index measures how much of an average income is needed to pay for an average Toronto home. Something in the 30s is good… Back in 1989, the index spiked to above 50%. The connection is clear: when people can’t afford to buy homes, homes stop selling.
Since 1996, the Toronto resale home market has been mostly positive and steady (with the one memorable hiccup in 2008). Year-to-year price increases have varied, but the pattern has been consistent. The average price increase over the past 15 years is just under 6% annually. That’s for the entire GTA, and most central neighbourhoods have gone up a bit more over the same time period.
The key takeaway from this chart? For almost 20 years, the Affordability Index has moved in a narrow band… As long as people have jobs, and interest rates don’t stray wildly from inflation, homes tend to stay affordable.