Toronto’s house prices are likely to continue their upward trajectory this year due to a supply crunch, pushing potential homebuyers to go for more affordable options, according to the latest market outlook by the Toronto Regional Real Estate Board (TRREB).
The overall average selling price in the region is expected to jump by 10% to $900,000 this year. TRREB said there is a high chance that the prices will keep inflating given the limited growth in new listings.
The end result will be an acceleration in price growth over the next year, as an increasing number of homebuyers compete for a pool of listings that could be the same size or smaller than in 2019,” TRREB said.
Home sales are slated to increase by 10% this year, hitting 97,000 from the 87,825 reported last year. This growth will be driven by the demand for condominiums, apartments, and higher density low-rise segments like semi-detached homes and townhouses.
“These home types are more affordable, on average, and will remain popular as the mortgage stress test, although under review by the federal government, appears to be remaining in place for the foreseeable future,” TRREB said.
The stress test has influenced the options of would-be homebuyers in the region in terms of price, dwelling type, and location. TRREB said while the detached house used to be the most popular type of home, the share of intending buyers who ended up seeking for such dropped from 54% in 2015 to 42% last year.
“This decline was evident both in the City of Toronto and surrounding regions. An increase in buying intentions for condominium apartments and semi-detached homes has accounted for the dip in detached buying intentions,” TRREB said.