Greater Toronto Area Realtors reported 7,032 sales in February 2012 – up 16 per cent compared to February 2011. The average selling price in the GTA market area was $502,508 in February – up 11 per cent compared to February 2011. New listings were also up over the same period, but by a lesser 11 per cent to 12,684. The Composite MLS® Home Price Index for TREB, which provides a less volatile measure of price growth compared to the average price, was up by 7.3 per cent compared February 2011.
“With slightly more than two months of inventory in the Toronto Real Estate Board (TREB) market area, on average, it is not surprising that competition between buyers has exerted very strong upward pressure on the average selling price. Price growth will continue to be very strong until the market becomes better supplied,” said Toronto Real Estate Board President Richard Silver. “It is important to note that both buyers and sellers are aware of current market conditions. This is evidenced by the fact that homes sold, on average, for 99 per cent of the asking price in February,” continued Silver.
“If tight market conditions continue to result in higher than expected price growth as we move into the spring, expectations for 2012 as a whole will have to be revised upwards,” said Jason Mercer, TREB’s Senior Manager of Market Analysis. “While price growth remains strong, the average selling price remains affordable from a mortgage lending perspective for a household earning the average income in the GTA.” Continued Mercer.
“Fears of a bubble are over inflated, unless there is the unlikely situation where jobless rates suddenly soar along with interest rates”, said Scotiabank Senior Economist Adrienne Warren. As mentioned in last report….Ottawa may now consider increasing down payment requirements for home purchasers and reducing amortization from 30 to 25 years to keep a watch on the industry.
Canada’s housing market remains “in fundamentally better shape” than most other international markets where economic and political uncertainty, high unemployment and worried consumers have deflated demand and prices.