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'First time in Toronto history': Condos just got more expensive than detached homes

Condo buildings line both sides of Gardiner Expressway in downtown Toronto, Ontario, Canada on August 31, 2017. Picture taken on August 31, 2017. REUTERS/Hyungwon Kang

On the same day the Bank of Canada announced it cut its interest rate, new data show the Greater Toronto Area’s real estate market is scorching.

The average price of a home was up 16.7 per cent to $910,290 in February compared to the same period last year, according to the Toronto Regional Real Estate Board (TRREB).

Condos once again led the way with a 17.3 per cent price jump.

"The condo market now actually appears to be more expensive (dollars per square foot) than the single-family residential market,” Sotheby's International Realty’s Christian Vermast, told Yahoo Finance Canada.

“That tipping point is the first time in Toronto history."

More than 7,250 homes changed hands, which is a 45 per cent jump from a year ago. Detached homes were the most popular choice for buyers.

But new listings were up only 7.9 per cent so supply struggled to keep up with demand — helping to push prices higher following another strong showing in January.

Last month TRREB forecast a 10 per cent price increase for the area, but that may turn out to be too conservative.

“While this outlook represents a very robust pace of growth, it is possible that further tightening in the detached market segment could push the overall average selling price above TRREB’s baseline scenario,” said Jason Mercer, TRREB’s Chief Market Analyst, in a release. 

“This could unfold if sales growth continues to outstrip new listing growth to the degree it has so far in 2020.”

Falling mortgage rates, a less strict stress test, and today’s interest rate cut could help make Mercer’s estimates come to fruition.

Sotheby's International Realty’s Paul Maranger says it’s too soon for a clear picture on where prices will go from here.

“It is erroneous to compare the lightly-traded months of January and February. The true test of the market will come after March break,” Maranger told Yahoo Finance Canada.

“Let's look to the end of June numbers for an accurate indicator of value."

Canada’s other high-priced market 

There’s a tale of two cities for Canada’s highest-priced real estate markets.

Home sales shot up a staggering 44.9 per cent in the Greater Vancouver Area in February, according to the Real Estate Board of Greater Vancouver (REBGV).

But listings are up more than 20 per cent compared to February 2019. 

“Our Realtors are reporting increased traffic at open houses and multiple offer scenarios in certain pockets of the market,” Ashley Smith, REBGV president, said in a release.

“If you’re considering listing your home for sale, now is a good time to act with increased demand, reduced competition from other sellers, and some upward pressure on prices.”

The average price of a home is up only 0.3 per cent to a still-lofty $1,020,600. Condo prices were up 0.9 per cent.

Steve Saretsky, realtor and author of real estate blog Vancity Condo, says the high-end luxury market remains soft.

“I am not seeing any flight to safety,” Saretsky told Yahoo Finance Canada.

“The Chinese/offshore money has been gone for over two years now. It's mostly locals bingeing on cheap credit now, competing over whatever affordable product is left over.”

Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.

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