Toronto home prices likely to rise 4 per cent this year
Condos are expected to continue driving price growth in the GTA through 2019.
The average Toronto area resale home price rose1.7 per cent year over year in January to $748,328, including single-family homes and condos, according to the Toronto Real Estate Board (TREB), which is forecasting a 4 per cent annual price increase for 2019.
That means homes that sold for $787,195 on average in 2018, would increase to $820,000 across all housing categories. But condos are expected to continue driving price growth this year, with detached houses anticipated to lag again.
“Although we won’t experience record levels, we do expect to see a better year in 2019 for sales and selling prices,” said TREB president Garry Bhaura in a news release issued prior to the publication of the board’s 2019 market outlook report on Wednesday.
TREB joined the growing chorus in the housing industry calling for the Office of the Superintendent of Financial Institutions (OSFI) to reconsider the mortgage stress test it introduced last year. The test, which is designed to protect consumers from drowning if their housing or other costs increase, means home buyers have to qualify for mortgages 2 per cent higher than they negotiate with their banks or the Bank of Canada’s five-year benchmark rate.
In a speech in Toronto on Tuesday, OSFI assistant superintendent Carolyn Rogers acknowledged that housing affordability is a problem. But she said the answer isn’t to allow consumers to pile on more debt. The stress test, along with higher interest rates, has been blamed for the volatility of the 2018 housing market following frenzied activity in 2016 and the first four months of 2017.
Home sales rose slightly year over year in January. The 4,009 transactions in the first month of 2019 was only 0.6 per cent higher than the same level last year, but was up 3.4 per cent from December, according to preliminary seasonally adjusted figures.
The average price of a detached house in the region was $941,488 last month, a 2.8-per cent year-over-year decline. Condos averaged $548,176, up 7.9 per cent compared to January 2018.