Hot summer market continues....

Posted by: Elise Stern, Created date: September 4, 2014

Hot summer market continues

Sales see double-digit growth

Recently the Bank of Montreal’s well-known chief economist, Douglas Porter, got some laughs with his parody of the Rolling Stone’s classic song, Sympathy for the Devil. Porter’s version poked fun at the housing bears who have been warning for some time that a crash is imminent. “Please allow me to introduce myself/I’m a bear of stealth and haste/I’ve been around for long, long years/Stole many homebuyer’s soul and faith,” wrote Porter. “Got it wrong last year too/Though I’ll keep saying the same/Ah, but truly scaring you/Is the nature of my game.”

Porter admits that the housing boom in Toronto cannot go on at this pace forever, but in the near future he believes interest rates are unlikely to see a huge jump. Demand for housing in the GTA remains strong.

In July, home sales in the GTA were up by 10 per cent compared to the same time last year. In the 905 regions, sales were up by 11.1 per cent.

In the City of Toronto, the average detached home sold for $880,433, up 11 per cent from a year ago. The average detached home in the 905 regions was $638,864, up 7.3 per cent. Semi-detached homes also sold well, at an average price of $635,311 in the city and $452,536 in the 905 regions.

Townhouses in the GTA sold for an average of $425,596, an increase of seven per cent compared to last July, while condo apartments averaged $357,345, up 5.3 per cent.

“Annual average price growth remains in the high single-digits or low double-digits for many home types across the GTA,” says the Toronto Real Estate Board’s senior analyst, Jason Mercer. “It is possible that we could see more choice for buyers in the second half of 2014 in the form of increased new listings. A sustained increase in choice for buyers could serve to gradually ease the pace of price growth in some market segments.”

While earlier generations were happy to cash in the built-up equity in their homes and move to smaller houses, condos or out of town, it appears the baby boom generation in Toronto is less inclined to move. They are staying in their large homes and often renovating them to suit their needs. The result has been fewer homes on the market.

Porter says that the boomers’ children, who have lived at home longer than past generations, are now in their prime house-buying years and will continue to boost the real estate market. Generally the echo boomers are in better financial shape than their parents were at the same age and can afford a home despite the rising prices during the past decade.

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