For the first time, the average selling price of a detached house in the City of Toronto has pushed past the $ 2 million mark, even as barely perceptible signs of a cooling wafted across the region’s sweltering housing market in February.
Although it was the second busiest February on record for home sales, there were 16.8 per cent fewer transactions compared to last year’s record-setting month – an even greater decline than the continuing drop of house and apartment listings, the Toronto Regional Real Estate Board ( TRREB) reported on Thursday.
But real estate board president Kevin Crigger acknowledged that the change in sales activity would have been imperceptible to consumers as competition among home buyers continued to push prices to record levels in many areas.
The average selling price for all houses and condos in the region was $ 1.33 million – 28 per cent above last February and about $ 90,000 above January’s average.
The $ 2.03 million for a detached house in the city was a 23 percent jump over the same month last year. In the 905 areas surrounding Toronto, detached houses sold for 33 percent more than a year ago to an average of $ 1.73 million.
Even condos, which had slumped in the first year of the pandemic, registered double-digit increases last month. In the 905, condos sold for $ 756,146, a 34 per cent year over year rise. Units in the City of Toronto climbed 21.5 per cent to $ 822,090.
But behind the soaring costs of homeownership, real estate agents have been reporting a recent shift in the housing market, suggesting that consumers, wary of bidding wars and bully offers, are pausing their home searches.
The real estate board says sales have slowed because many buyers moved up their home purchases during the pandemic, taking advantage of historically low mortgage rates and a belief that working from home freed them up from commuting so they could get more space for their money by moving further from downtown.
Despite the market’s ever-so-slight tip away from sellers, it will take time for price growth to slow because the number of homes on the market remains exceptionally low, said the board’s chief market analyst Jason Mercer.
“Look for a more moderate pace of price growth in the second half of 2022 as higher borrowing costs result in some households putting their home purchase on hold temporarily,” he said, referring to rising interest rates.
On Wednesday, the Bank of Canada announced the first increase in its key lending rate since 2018. The .25 per cent increase that will hit variable rate mortgage holders this week, is likely the first of several hikes forecast to bring the central bank’s overnight rate to 1.75 per cent by the second half of next year. That’s after two years of a historically low .25 per cent key rate.
Mortgage experts, who spoke with the Toronto Star this week said interest rates will have to move beyond this week’s .25 point increase before consumers reconsider their home purchases.
Although single-family home listings fell year over year, condo listings were up, particularly in the City of Toronto, said the real estate board. Overall, there were 6.6 per cent fewer new listings in February, compared to the same month in 2021. Active listings plunged 20 per cent in the same month.
Durham Region saw the highest price growth in the real estate board’s territory with both condo and house prices up at least 45 per cent year over year.
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