In: Real Estate News12 May 2011
Every year for the past 16 years, the average price for a home for sale in Toronto has increased. According to the Toronto Real Estate Board’s month report, the real estate market in Toronto has gone from an average price os $198,150 in 1996 to an average price of $431,463 in 2010, and an average price of $457,876 so far in 2011.
This is 16 years without a decline. Even in the financial crisis of 2008, the average price for a home in Toronto grew from $376,236 to $379,347. In April of 2011, a new average price record was set: $477,407. These statistics indicate that the real estate market in Toronto has been on fire.
The average price for home in Toronto can vary throughout the year. November and December typically have the lowest prices of the year (although not always) and March, April, and May typically have a higher average price. Although it’s difficult to generalize by month because if the market is rising quickly thought the year, then home prices at the end of the year will be higher than the beginning.
There are a multitude of factors that affect the average price for a home in Toronto. These include:
Supply (number of listings)
Demand (desire to own a home)
In the past 16 years we have seen these factors positively affect the average price:
Supply (number of listings): The supply of homes (resale and new) has remained steady and has not outpaced demand.
Interest Rates: Interest rates have been remained low or declined for the past 16 years.
Employment Rate: Apart from the financial crisis, employment rate has remained at an adequate level.
Mortgage Rules: Mortage rules have, until recently, softened to make it easier for home ownership.
Demand (desire to own a home): Demand to own a home seems to be at an all time high. 70% of Canadians now own homes. It’s become part of our culture to frown upon renting and applaud home ownership.
How high can the average price for a home for sale in Toronto climb? This question does not have an answer yet. Every time we see a new high set, we wonder is this it? But until now, there has always been an higher high! The Canadian Real Estate Association is forecasting new highs for 2011!
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