In the latter half of the 2010s, home prices in Toronto began to rise after a period of consistent decrease. Recently, the housing market saw the largest price gain since December 2017 with a rise of 5.2 per cent. It is projected by real estate experts that housing prices are projected to continue growing into 2020 with the average price expected to exceed $900,000 for a residential property.

2019 Market

Reports have stated that more than 70,000 properties were purchased in Toronto in 2019 at an average price exceeding $800,000. These numbers reflect significant growth from the previous year, and based on existing patterns, it is reasonable to expect this trend to continue.

Influencing Factors

The rising home prices in 2017 were in part driven by government influence with policy changes designed to impact the market. However, the recent growth was largely driven by a matter of supply and demand. With fewer houses on the market, home prices naturally rose to accommodate the high demand. Additionally, higher employment rates, widespread economic growth, and an increasing population (attributed to family growth as well as immigration) have also contributed to this rise in housing prices.

Supply and Demand

Because the increasingly low supply and high demand of homes in Toronto, home prices are slated to rise until more listings are made available. Currently, homes do not remain on the market for very long, only for an average of under 5 months, so potential buyers have limited options. Fortunately, it seems like mortgage rates are not rising at the same pace as home prices, but the slim options make securing a new home challenging.

Rental Properties

While the real estate market has witnessed a decrease in available properties, the same trend is occurring for rental properties, as well. Because of the limited number of homes on the market, more residents are looking to rent. However, the high volume of potential renters has also resulted in low rental vacancy. In fact, the rental vacancy rates last year were the lowest they have been since 2002. This has resulted in a growing rental rate due to the high demand and low supply of rental properties.

Mehran Redjvani is a realtor located in the Toronto suburbs. For more information, please contact him at (647) 206-8564.