Market Remains Tight with Sales Up in April
TORONTO, May 3, 2012 –
Greater Toronto REALTORS® reported 10,350 transactions through the TorontoMLS system in April 2012. This level of sales was 18 per cent higher than the 8,778 firm deals reported in April 2011. The strongest sales growth was reported in the single-detached market segment, with transactions of this home type up by 22 per cent compared to a year ago.
“Interest in single-detached homes has been very high, both in the City of Toronto and surrounding regions. Growth in single-detached listings has not kept up with demand, which means competition between buyers in this market segment increased. With this in mind, it was no surprise that the strongest annual price increase was also experienced in the single-detached segment,” said Toronto Real Estate Board President, Richard Silver.
The average price for April 2012 transactions was $517,556 – up 8.5 per cent compared to April 2011. While price growth was strongest for single-detached homes, the better-supplied condominium apartment segment experienced a more moderate annual rate of price growth, at four per cent.
“Monthly mortgage payments remain affordable for home buyers in the Greater Toronto Area. While interest rates are generally expected to increase over the next two years, the extent and timing of rate hikes has been thrown into question by slower than expected economic growth in the first quarter of this year. On net, borrowing costs are expected to remain a positive factor influencing home sales through 2012,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.
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Jonathan’s Opinion
The Toronto Market is definitely not showing any signs of slowing down, let a lone correcting. The main reason, as you know, is because of the cheap access to money (low rates). The second reason, as equally important, is the lack of supply on the markets.
Low interest rates and lack of supply will keep this type of market going. There will not be a change in the real estate market activity until there is a change in the monetary policy.
If interest rates remain low (which I believe they will throughout 2012), the housing market will continue being robust, and prices will continue increasing, or will plateau.
They will certainly not correct.
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