The prices of homes in Toronto increased significantly in June and that has been a result of the sales increasing as well, but it has also narrowed the option of buying homes affordably for buyers with a moderate budget. As of now, about 8860 homes were sold in the last month and this is a rise of 10% from the numbers in the same month the previous year, according to a report published by the Toronto Real Estate Board. Since nee listings went down by 0.4%, there has been an increase in the competition among buyers and prices across several segments shot up.
The benchmark prices that are adjusted for the type of housing that are on sale also rose by 3.6% and currently stands at $798,500 from just a year ago and the sales are mostly led by semi-detached homes, townhouses and condos. Also, there has been an increase in the average price of homes from last June of about 3% and that stands at $832,703. The sale of detached homes had also increased remarkably by 19% from the last year but they were also the only segment to see a reduction in price on an average basis, which was around 1.4%.
What the industry is keen on
The good news for the industry is that the home sales in Toronto had increased steadily in the recent months after a visible slowdown and the tighter mortgage and lending rules, coupled with higher interest rates was one of the reasons why the sales slackened. The housing board had urged policy makers to make mortgage qualifications more flexible and to take the measures necessary to increase the supply.
The lack of significant new listings meant that the market tightened and the prices picked up and this was seen especially in the case of higher density homes which are more affordable than traditional detached homes. The segment that saw a significant drop in sales was the condo segment and it fell by 3.2% from the same period last year and the decline was mostly seen in the heart of the city. The sales fell by 5.6% as compared to the gain by 2.7% in the Greater Toronto region. Nevertheless, there was some improvement and the benchmark priced increased by 7.5% in June to $ 539,500 from the same month just a year ago. Likewise, the number of condos that were leased out also increased in numbers and jumped by 15% in the second quarter and rose to 9749 from the same period last year.
The rent of homes also continued to rise, albeit a bit slowly. For example, a 1 BHK in Toronto region that was rented on an average for $ 2192 in the second quarter, was about 6.7% higher compared to last year but was only a little higher than $ 2143 in the first quarter. The rent of the 2BHK condos also rose to 4.3% and was at $ 2873. According to the industry experts, the renters were benefitting somewhat from these arrangements and the increased supply but the growing rates of inflation were to be controlled if the trend was to continue and greater supply was needed to cater to the growing population and formation of new households.