Housing prices in Toronto area set to rebound: Royal LePage
Housing prices in Greater Toronto Area are expected to reverse course in the second half of the year after a brief slump, according to a Royal LePage forecast, despite the threat of escalating CanadaU.S. trade tensions that could dent the Ontario economy.
In its quarterly forecast released Tuesday, real estate firm Royal LePage expects housing prices in the GTA to rise 2.1 per cent in the third quarter, underpinned by a growing labour market, steady economic growth and still-low interest rates.
“Based on our analysis the market has bottomed out,” said Phil Soper, the CEO of Royal LePage.
Lower prices in the GTA and tighter federal mortgage stress tests dragged down the rest of Canada over the quarter, which “slowed the market to a standstill in much of the country” the Royal LePage report said. It also noted that Greater Vancouver home values are forecast to rise 1.5 per cent over the next three months.
“Purchasers look to condominiums for relative affordability, yet with competition continuing to intensify, property values within the segment now outstrip most detached markets across the country,” wrote Adil Dinani, real estate adviser at Royal LePage West Real Estate Services. “To put it into perspective, the budget now needed to purchase a condo could have netted someone a two-storey home here in Greater Vancouver four years ago.”
Soper said headwinds for housing prices in the Toronto area will be mopped up by the current undersupply of new homes, as Ontario’s population continues to grow and in-migration levels reach their highest in more than 10 years. The province saw a net gain in migration over the first quarter of 2018, a nearly 50 per cent increase from the year earlier. “We’re nowhere near the kind of housing construction rate that we need to accommodate these people,” he said.
The rise in prices would mark a sharp turnabout. Aggregate home prices in the GTA fell 1.9 per cent in the second quarter of 2018, according to Royal LePage data, down to $821,632.
The dip followed a major decline earlier this year, when prices for detached homes fell 17 per cent in March, according to the Toronto Real Estate Board. That in turn pulled down selling prices across the board by 14 per cent, the largest drop in nearly 30 years.