This should come as no surprise. The average price of real estate in the Greater Toronto Area continued its double digit growth.
September 2016 saw a 20.4% increase in average price over September 2016. Sales continued to climb, up 21.5% last month.
Active listings continue to remain scarce. Fewer listings are coming to the market. The number of homes available for sale was down 36.6%, and new listings coming to the market was down 5.6%. Meanwhile, homes sold faster taking an average of only 16 days on the market.
The average price for detached homes in Toronto climbed 23% to $1,294,482. Semi-detached homes averaged $887,916, up 19.7%. Townhouses rose 24.3% to an average price of $655,466. And condos edged upwards 6.5% to $446,294.
What could affect average price moving forward
The announcement of tightening mortgage rules will definitely have an effect on the real estate market, but only time will tell how profound these rules will be on the prices of homes and the availability of homes for sale. Since the new rules will take effect October 17, there will likely be a rapid surge in sales during the first two weeks of October as buyers scramble to buy their homes before having to qualify under much tighter criteria.
One of the effects of the mortgage rules will be on affordability. Buyers will afford a lesser amount of real estate under the new rules. This is due to the stress test criteria. Buyers need to qualify under the five year posted fixed rate even though they can still avail of today’s low interest rates.
The likelihood of mortgage rates increasing is a possibility. Lenders will now have to increase their capital requirements to share the risk alongside the government. This could result in rate increases to mortgage products but we may not see this happen right away.
Townhouses and condos becoming popular choices
As freehold detached homes surge in price, townhouses and condos are becoming the go-to choice for many first time buyers. These two categories still offer an affordable way to live in the city without spending seven figures for property. Condos continue to see rapid increases. The inventory of condo listings is slowing decreasing as a result of buyers choosing the condo alternative.