The trend of robust activity in the Greater Toronto Area (GTA) housing market continued in February, with multiple-buyers competing for the available listings. As demand heated up, double-digit price growth continued, with the average price for GTA homes officially eclipsing the $1 million mark for the first time in history.
Last month, the Toronto Regional Real Estate Board forecast that the average selling price for a GTA home would rise about 10% this year to pass $1 million dollars, though they didn't forecast it would happen quite so quickly.
The average price of a home in the region -- including all types of houses and condos -- rose 14.9% year-over-year to $1.05 million last month, according to TRREB.
“In the absence of a marked uptick in inventory, the current relationship between demand and supply supports continued double-digit average home price growth this year,” said the board’s chief market analyst Jason Mercer.
According to the Toronto Regional Real Estate Board (TRREB), there were 10,970 sales recorded in February -- a 52.5% increase compared to 7,193 sales reported during the same month in 2020.
During this time, TRREB says there were 15,137 new listings in the GTA, with 10,431 in the '905' area and 4,706 in the '416'.
“It’s clear that the historic demand for housing experienced in the second half of last year has carried forward into the first quarter of this year with some similar themes, including the continued popularity of suburban low-rise properties," said TRREB President Lisa Patel.
Though, Patel also warned that the continued rollout of the vaccine and the inevitable resumption of population growth will likely further increase the demand for housing, which "could present an even larger problem."
The board said buyers remained confident in their employment situations and took advantage of ultra-low borrowing costs, which helped push the average selling price of a detached house in the 905 to $1.3 million -- 27.8% above February 2020. Here in Toronto, detached houses sold for $1.7 million on average -- a 13.2% annualized increase.
While market conditions were tight throughout the GTA region last month, the detached, semi-detached, and townhouse market segments in suburban areas were the drivers of average price growth, with annual rates of increase above 20% in all three cases.
"It’s not surprising to see this kind of continued growth and activity within the GTA, with rising demand and limited supply greatly impacting the market," John Dowbiggin, Regional Director, RE/MAX of Ontario-Atlantic Canada told STOREYS.
"The condo segment specifically saw strong sales due to lower prices, which took a downward turn last year prompted by Covid-19, when buying preferences shifted from downtown condos to detached suburban homes."
Dowbiggin added thatthe high demand and subsequent multiple offer scenarios that we’ve been seeing in the market are limiting options for buyers and driving them back toward condos. Though, he said if sales continue to outpace new listings, prices could see continued improvement.
Condo activity also heated up last month, with transactions up 64.3% year-over-year, after 3,116 sales were recorded. The 416-area accounted for 2,167 sales (up 63.2%), while the 905-area saw 949 condos change hands, a 66.8% year-over-year increase.
Condo prices also continued to climb in the 905 areas -- up 5.4% year-over-year to an average of $563,587, while prices for apartments continued to fall in Toronto, declining 6.4% compared to last February to an average price of $676,837.
Though, if sales continue to outstrip new listings, those prices could also climb, said Mercer.
“Renewed price growth in this market segment is a distinct possibility in the second half of the year,” he added.
TRREB's report comes on the heels of the Canada Mortgage and Housing Corporation (CMHC) predicting that housing prices in big cities like Toronto will continue to climb through 2021.
However, the national housing agency did warn the sustainability of this trend will depend on the uncertain course of the pandemic and said that there are still underlying issues that could impact the overall housing market in the months to come.
Dowbiggin says given buyers in the GTA continue to show that they have a strong and unwavering interest in the market, which is likely to continue this year, ultimately making the supply issue even more critical.