Toronto, October 20, 2011
– Greater Toronto REALTORS® reported 7,658 transactions through the TorontoMLS® system in September – a 25 per cent increase over September 2010. Sales during the first three quarters of 2011 amounted to 70,588, representing a 2.6 per cent increase compared to the first nine months of 2010.
“We have experienced strong growth in sales so far this year, with a much more active summer compared to 2010. However, while sales have been strong, we have continued to experience a shortage of listings, resulting in more competition between home buyers,” said Toronto Real Estate Board President Richard silver. “Over the past few months, the listing situation has started to improve, so we expect home buyers will have more homes to choose from in the months ahead.”
With annual growth in sales (+25 per cent) outstripping annual growth in new listings (+15 per cent) in September, market conditions became tighter and the average selling price continued to grow by close to 10 per cent on a year-over-year basis.
“Strong price growth through the first nine months of the year was mitigated to a great degree by low interest rates and rising incomes,” said the Toronto Real Estate Board’s Senior Manager of Market Analysis Jason Mercer. “As buyers continue to take advantage of the affordable home ownership options in the GTA, we remain on pace for the second best year for sales under the current TREB market area.”
Jonathan’s Opinion
We have another month of higher prices.
This story will go on and on if interest rates do not increase. However, it is simple to just say that rates have to go up, and there are several reasons that the bank of Canada is keeping them low. The principle reason is because of the growing concern in the U.S. If Canada were to raise the interest rate, our dollar would be seen as a more attractive investment over the U.S. dollar (the reason is because our dollar would be earning more interest in our banks), and more investors would flock to our banks as somewhere to park their money. This would ultimately lead to our dollar increasing in value.
While most people would say that that is great, it’s not really…if our dollar increases relative to the U.S dollar, then our products would be more expensive for them to buy. This is would ultimately decrease our exports to the U.S also. This would definitely not be a good thing because over 70% of all our exports are to the U.S.
As you can see, the situation is much more complicated than one would assume, and it is interesting to see how it will be resolved. In a nut shell, Canada has to start building ties with other countries and start exporting to them (i.e. China, and India), and stop being so dependent on the U.S.
