Greater Toronto real estate prices are moving at one of the fastest rates in history. Toronto Regional Real Estate Board (TRREB) data shows home prices hit a new record in November. The result was home prices soared by tens of thousands, printing a fifth of annual gains in just 30 days. Excess demand, driven by easy monetary policy to entice investors, has put a big strain on supply.
Greater Toronto Real Estate Prices Soar $44,000 In A Month
Greater Toronto real estate prices are soaring again and doing it at a record pace. The TRREB benchmark (i.e. typical) home reached $1,172,900 in November, up 3.92% ($44,300) from just a month before. Composite home prices across the region are now 28.31% ($258,785) higher than last year. This is a record high for prices in the region and nearly a record for the rate of price growth.
Greater Toronto Benchmark Price
The price of a “typical” composite home across Greater Toronto.
Source: TRREB; Better Dwelling.
Home prices in the City of Toronto are moving slightly slower, but only in contrast to the 905. The cost of a benchmark home hit $1,190,300 in November, up 3.41% ($39,300) from a month before. Prices are now 19.97% ($198,135) higher than last year. Home prices in the city have also reached a new record high.
Toronto Real Estate Is Seeing The Highest Growth Since 2018
Home price growth had been slowing until August, when it abruptly reversed direction. Despite a more robust economy, policy measures are being used to drive more buying. The result is Greater Toronto seeing the highest annual growth rate since 2018. Promising more demand-driving measures during the election didn’t cool buying, it appears.
Greater Toronto Benchmark Price Change
The annual percent change of TRREB’s benchmark price for all home types.
Source: TRREB; Better Dwelling.
When dealing with a wall of numbers, it’s sometimes hard to appreciate what they’re showing. For home prices across TRREB, 18% of gains over the past year were made in November. In the City, 20% of annual gains resulted from price increases made just last month. One in five dollars of price growth occurred in what’s
traditionally a slow month.
Soaring prices are attributed to tight supply, but escalated demand is overlooked. Greater Toronto home sales in November were more than 20% higher than the median seen in the past 5 years. In contrast, new listings are just 4% below the median. Monetary policy can entice more buyers, but not necessarily sellers.
The role of monetary policy in driving excess demand is only just going under the microscope. BMO estimates excess home sales have reached about 6% of Canada’s GDP. That’s excess home sales, above and beyond what would be considered normal. This appears to have helped investors in Ontario more than first-time buyers. Whatever the cause, there’s no light at the end of the tunnel yet. Especially with the BoC maintaining these are just transitory issues. An optical illusion, if you will.
The more the price goes up, the more glorious the crash.
People are going to be looking back and wondering how no one saw the obvious signs, much like what happened in 2008.
Sun is still rising from the East?
For now!
So someone had extra 44k to shell out on buying when they lost previous month, yet BOC feels there is no concern. What they are missing is that rentals also go up. Most of apartments are over 1800 pm in most of GTA.
Well, the US fed says it’s not transitory there….oh! Boy!
I do not understand why the housing permits got cut. Obviously there are so much demand on the market. To keep the price going up forever?
I strongly believe this is man made supply shortage.
Restrictive zoning is part of the problem. But the bigger issue is artificially induced demand through low interest rates and high immigration.
Zoning capacity is a fundamental, so an increase of zoning increases home prices.
That price increase happens before any housing is built, so home prices rise before any actual increase in supply. The drop in price is because you’re buying less house, not actually due to a release in supply.
Either way, doesn’t make a difference to me other than my property taxes go up, but so does my home’s value.