Real-Estate Transactions Jump in Toronto as Home Prices SoarBy and
Month-over-month increase in sales is the most since 2014
New listings in Canada’s biggest city surge 17 percent
Soaring home prices in Toronto have triggered a flurry of real estate activity in Canada’s biggest city, the latest sales data suggest.
Transactions jumped 6.4 percent in February on the month, the most in three years, as sellers emerged with new listings rising 17 percent, the Canadian Real Estate Board said in a release. Benchmark home prices were up 3 percent last month, the second biggest monthly gain in the past decade.
The recent jump in home prices in Toronto, with prices up 24 percent from a year ago, has raised considerable alarm, in part because it coincided with a dearth of new listings. Even with last month’s gain, new listings are down 13 percent from year ago levels.
“Any lingering debate that Toronto is now in a bubble was put to rest by
February’s cannonading 24 percent” rise in benchmark prices and “razor-tight
inventories,” Bank of Montreal Chief Economist Doug Porter wrote in a draft note to clients.
Even some Canadians earning C$225,000, which puts them on the cusp of wealthiest “1 percenters,” would be shut out of the market for homes worth more than C$1 million when taking into consideration mortgage qualification and insurance requirements -- even if they’ve saved for a hefty down payment, Porter said.
Still, such obstacles don’t appear to be slowing the region’s housing boom.
“Homes are selling briskly throughout the Greater Toronto Area and nearby communities,” Cliff Iverson, president of the Ottawa-based realtor group, said in the statement Wednesday.
New listings in Toronto have posted monthly gains of more than 17 percent only four other times in the history of data going back to 1988.
Nationally, the jump in Toronto transactions pushed overall Canadian home sales up 5.2 percent in February. Canada benchmark home prices were up 2.4 percent during the month, with 12 of 14 major markets recording higher prices.
Porter said amid such frothiness a tax on non-resident purchases is a reasonable way to cool the market. “That tax seems to have done exactly what policymakers hoped to achieve in Vancouver -- cool the market without crashing it.”
— With assistance by Erik Hertzberg