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Summary
- TRREB president Lisa Patel said that the estimated economic regrowth and low borrowing costs have boosted home sales.
- From the peak pandemic period of March 2020, new listings surged 57 per cent.
- Earlier in March, the Canada Mortgage and Housing Corp. (CMHC) had warned that the Canadian real estate market may overheat anytime soon.
Toronto home prices continued to surge in March 2021 even as debates on whether the government should try to cool down the market heated up. The Toronto Regional Real Estate Board (TRREB) said on Tuesday, April 6, that the surge has brought the annual average price gains to over 20 per cent.
The total number of sales was at 15,652, an increase of 97 per cent year-over-year (YoY). The home sales surged after mid-March. During the first 14 days of March, the sales were at 6,504 units only. Starting March 15 and ending March 31, the reported sales were at 9,148 units, up by 174 per cent compared to the same period last year.
From the peak pandemic period of March 2020, new listings surged 57 per cent. This year in March the new listings were 22,709 against 14,434 units last year.
TRREB president Lisa Patel said that the estimated economic regrowth and low borrowing costs have boosted the home sales last month at a record pace.
The report suggests that the detached homes in the 905 area code sold houses at an average price of C$ 1.32 million. This area is adjoining the city's core area. Across the metropolitan areas, the average price of houses sold was C$ 1.1 million during March.
Price surge igniting debates
Some market experts believe that the cheap mortgage rates and work-from-home provisions have spiked the demand for houses and that the market may come down crashing if timely measures are not taken by the federal government.
Economists from the Royal Bank of Canada and Bank of Montreal had earlier called upon the government to bring in measures for cooling down the market. They had urged that timely action from the government would stop the housing prices from becoming unaffordable for first-time buyers.
Top executives like Bharat Masrani, Chief Executive Officer of the Toronto-Dominion Bank and Jean-Francois Perrault, Chief Economist of the Bank of Nova Scotia, however, believe that the government shouldn't rush and that the problem of rising prices can take care of itself.
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CMHC had earlier issued warnings
In March, the Canada Mortgage and Housing Corp. (CMHC) had expressed its concern and warned that the Canadian real estate market may overheat anytime soon. It had mentioned its report that it was for the first time that the market was showing such signs of overheating.
The CMHC survey had stated that the housing sector was facing vulnerability for the second consecutive quarter. It also named Toronto among five areas that contributed to increasing the market pressure and overheating.
