Market Update for Feb 26th
In Toronto, that translates into a growing price gap between detached homes and semi-detached properties and in some cases, dozens of competing offers are driving up house prices at a rate that is beginning to look worrisome. The number of homes that sold in Toronto in the $1 million to $1.25 million rose from 8.8% to 12.1% between March and October. In the meantime, average household savings rates rose from 2% at the end of 2019 to 27.5% in the second quarter of 2020.
This report comes a day after Bank of Canada governor Tiff Macklem suggested there were signs of “excess exuberance” in real estate, with people buying homes based on the belief that prices will continue to rise. But he said the market is not yet at the level of frenzy Toronto saw five years ago before governments stepped in with cooling policy measures. Governments looking for ways to slow down the market should wait and see if more listings come online in the spring to help lessen some of the competition in the market. With easing restrictions and vaccinations coming soon Sellers might be more comfortable listing their homes.