TORONTO – July 6, 2011
Greater Toronto REALTORS® reported 10,230 home sales through the Toronto MLS® system in June 2011 – up 21 per cent compared to June 2010. This number represented the third best June result on record behind 2007 and 2009. The number of transactions during the first six months of 2011 amounted to 48,189 – down by 4.5 per cent compared to the first half of 2010.
“The strong June result capped off an interesting first half of 2011,” said Toronto Real Estate Board President Richard Silver. “The pace of sales was a bit sluggish at the beginning of the year, but rebounded in May and June. Because of the positive affordability picture, home buyers remained confident in their ability to purchase and pay for a home over the long term.”
The average price for June transactions was $476,371 – a 9.5 per cent increase over June 2010. Through the first six months of the year, the average selling price was $467,169 – almost an eight per cent increase compared to the same period in 2010.
“While sales have been strong, we would be on track for a record number of transactions in 2011 if not for the decline in listings so far this year,” said Jason Mercer, the Toronto Real Estate Board’s Senior Manager of Market Analysis. “Tight supply meant more competition between home buyers and an accelerating annual rate of price growth in the second quarter.”
“Home owners will likely react to the stronger price growth by listing their homes in greater numbers. A better supplied market would result in more moderate price increases,” continued Mercer.
Jonathan’s Opinion
We have another month of higher prices.
This story will go on and on if interest rates do not increase. At the beginning of the year the Bank of Canada announced that rates would undoubtedly increase in March, which never happened, then July, which never happened, and now they are saying that the rates will remain unchanged until the beginning of 2012.
Yes the economy is still recovering, and an increase in interest rates could hinder this recovery, but I can guarantee you that if prices keep increasing as they do, along with Canadian debt loads, the future of the economy will not be so bright. At one point or another, interest rates have to go up, in order to slow down inflation. The BOC should not wait until there is too much inflation…they should start raising rates now. It is better to feel some temporary pain when debt loads are lower, rather than feeling it later, when debt loads are higher and prices on everything (not just real estate) are inflated, don’t you think?? Affordability can become a major issue.
