According to Move Smartly’s recent survey, the median property price in Toronto has increased by 33% over the previous year.
The median home price in Toronto was $1,265,000 in October, up a third from the same month in 2020. The average home price has also risen dramatically, climbing 28 percent from October 2020 to a record high of $1,455,088.
The number of new listings continued to decline while prices rose across the board, fueling competition and rising real estate prices. The number of new postings in Toronto was down 33% year over year in October. There were only 3,687 residences on the market at the end of the month, down 56 percent from the same time previous year. In a typical year, there are roughly 12,000 active house listings on the market in October, according to the research.
Despite the fact that listings in the Toronto condo market have been more plentiful, the number of units available for purchase is still down 36 percent from 2020. In comparison to last year, the number of active condo listings at the end of the month was down 54 percent. The average condo price in Toronto, on the other hand, is up considerably from last October, at $730,726.
The record low mortgage rates that have enticed would-be purchasers to enter the market have contributed to the increasing demand for houses. And, while some homeowners are concerned that a possible increase in the Bank of Canada’s low-interest rates could lead to a market correction and subsequent price decline, the analysis claims that this is unlikely to occur in the near term.
“Firstly, most homeowners in Canada have five-year fixed-rate mortgages so most homeowners are unlikely to feel the impact of higher interest rates next year,” the report reads. “Secondly, homebuyers in Canada over the past five years have been qualifying for their mortgage at a ‘stress test’ interest rate, which is much higher than what they are paying. These tests were introduced by our authorities precisely for this situation of rising interest rates; homeowners who qualify under these tests should be able to handle the costs associated with a higher interest rate on their mortgage when they do need to renew.”
Higher interest rates, on the other hand, may reduce demand across the housing market, according to the report. However, because demand currently outstrips supply, it is unlikely to have a big impact.