Home prices on sky-high path, firm says
Re/Max credits strong economy for predicted 6 per cent increase in Toronto next year
Home prices are predicted to rise six per cent next year in the City of Toronto, bringing the average cost of a resale home up to $993,691, according to a new report from Re/Max.
The average resale home price, which includes houses and condos, was $880,841 in Toronto between Jan. 1 and Oct. 31 of this year.
The real estate brokerage credits a strong local economy, high employment and improved affordability for its decision to forecast Toronto price growth that’s two percentage points higher than the 3.7 per cent national outlook.
“Anytime you’re in that five to eight per cent range it’s sustainable and it’s good for homeowners — it helps them build some equity,” said Christopher Alexander, executive vice-president and regional director of Re/Max.
Other Ontario markets that have seen home prices soar this year are expected to continue growing, but at a more moderate pace. London, Ottawa and Windsor, which saw price gains in the low double-digits, are forecast to see increases of five per cent, six per cent and nine per cent respectively.
The Niagara Region, where prices rose 13 per cent between 2018 and 2019, is expected to continue attracting
Toronto-area buyers with prices forecast to grow seven per cent next year, according to the Re/Max 2020 Housing Market Outlook Report released Tuesday. The report predicts that prices will increase by five per cent in 2020 in Oakville, Mississauga and Brampton, and three per cent in Durham Region. No York Region numbers were provided.
“There are a number of people who want to have the urban lifestyle and have access to urban style amenities, so they’re looking at different parts of the province that offer some of what Toronto offers. But there are still more people moving into Toronto than there are leaving,” said Alexander.
He said he isn’t worried about rumblings of a pervasive economic slowdown.
“From what we’ve seen in the latter half of this year and the local economy, I don’t even see that having a big effect on most of Canada,” said Alexander.
A Leger survey for the company found that 2-in-10 Canadians said the mortgage stress test had impeded their ability to buy a home this year. The test requires home buyers to qualify for loans at a rate two per cent higher than the banks actually charge them.
There’s always an adjustment to government policies in the real estate market, said Alexander. Typically it’s three to five months. “The stress test numbers were so deep it took longer. It also helped that interest rates went down,” he said.
The online Leger survey of 2,003 Canadians in February is considered to be accurate within 2.2 per cent 19 times out of 20.