Toronto Real Estate Market Continues in the Fast Lane
Only 12 months ago, the news about the Toronto real estate market was dismal: prices had fallen
significantly in the wake of the financial crisis, and the inventory of unsold homes was very high. What a
difference a year has made! Prices began rising again last Spring and, by the Summer, prices were once again at all‐time record highs. The inventory of unsold homes has fallen to a record low, and rock‐bottom low mortgage interest rates have brought home buyers out in droves. The result has been a return to frequent bidding wars, with selling prices often much higher than asking prices.
The graph below shows the trends in monthly average selling prices in the Greater Toronto area over the past five years (data from the Toronto Real Estate Board’s Market Watch publication):
The outlook for the 2010 Spring market is very positive, as most analysts expect that the momentum
generated in 2009 will carry through at least the first half of 2010. Prices will likely move even higher, and inventories will probably remain low. The outlook for the second half of the year is more uncertain,
however. First, the HST will be introduced in July, and this will add 8% tax to all services, including
commissions, home inspection fees, legal fees, etc. Second, interest rates are almost certain to begin
moving upward, however modestly, by the Summer. Both of these factors seem likely to put a bit of a
damper on our hot market.