Is this for real?
The chart above shows Toronto home prices shooting up by around $100,000 – over five months. Is this for real? Here are a few points to ponder…
1. The seasonal curve would have us expect a $50,000 price increase from January to May – in a “normal” year.
2. There will be some backsliding in the numbers between now and the end of the year. August and December are typically low points in the curve.
3. The average annual price increase for the Toronto area has been around 7.5% over the past five years. The longer term price increase has been around 6% per annum. This could be a 9% year.
4. The “Toronto” figures you see reported in the media are actually the GTA results. About two-thirds of the houses and one-third of the condo apartments being reported are sales from the “905” area. Prices in 905 are going up just as much as prices downtown.
5. The price increases we’re seeing are not the result of scarcity. Resale listings have actually been increasing; but demand has been going up faster.
The short answer
Yes, this is an unusual year. The usual spring bump has been amplified by currency adjustments and a consolidation of Toronto’s global position. Toronto may not be New York or London, but Toronto is a major city on the world stage.
And yes, the demand for housing is real. The Millennial generation is entering the “household formation” years, and they are an even larger cohort than the Baby Boomers. Their preferences will have – and are already having – a profound influence on the housing market.
The right time to sell
The numbers point to a continuing sellers’ market. Do you know someone who may be ready to sell their home this year? We’d like to hear from you. With our expert marketing, that home will get sold quickly and for the highest price! You can email us, or call James and Joanne at 416-483-8000.