Photographer: Norm Betts/Bloomberg

Toronto Housing Has a Record Year Amid Supply Shortages

Toronto’s housing market posted a record year in 2016 that saw double-digit price gains, tightening supply and the cost of an average home surpass C$700,000 ($526,355) for the first time.

Sales figures released Thursday by the Toronto Real Estate Board show the city’s realtors sold C$82.6 billion worth of homes last year, an increase of almost C$20 billion from 2015. Unit sales rose 12 percent and prices increased by more than C$100,000 to an average C$729,922. That’s up 17 percent from last year -- the largest annual gain since 1989.

The data underscore how Canada’s largest city has defied all attempts by government officials to slow a housing boom that is both a major engine of growth and a source of intense worry. Soaring costs are fueling household indebtedness and homes are becoming unaffordable to many, which could pose a risk to financial stability if the market corrects suddenly. Toronto home prices, which have doubled over the past decade and tripled since 2000, may show little moderation without steps to address a shortage of homes, the realtor group said in the statement.

“If we want to see a sustained moderation in the pace of price growth, what we really need is more policy focus on issues impacting the lack of homes available for sale,” Jason Mercer, the real estate board’s director of market analysis, said in the statement.

Active listings at the end of December were down 48 percent from a year earlier, and were at their lowest levels in more than a decade, the board said. Home sales sold in the final month of 2016 totaled 5,338, an 8.6 percent increase from a year ago, making it one of the best December’s on record. Average home prices in December were up 20 percent from a year earlier.

Here are some other highlights from the report

  • Realtors sold 3,117 homes valued more than C$2 million. That’s almost double the number in 2015.
  • 19,318 homes sold last year were at values north of C$1 million, 17 percent of total homes sold.
  • 32 percent of all detached homes last year sold fore more than C$1 million
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