6 October

GTA housing market continues to boom, sales increase 42%, house prices rise 14%

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In the past three months, Toronto’s houses have sold very well, with more than 10,000 units in three consecutive months, and housing prices continue to rise.

According to a monthly report released today by the Toronto Regional Real Estate Board (TRREB), GTA regional real estate brokers reported 11,083 transactions through the MLS system in September, an increase of 42.3% over the same period last year, and the price increase of homes reached 14%.


Transaction of 11,083 houses set the highest record in September

The TRREB report stated that 11,083 properties were sold last month, an increase of 42.3% from the 7,791 properties in September 2019 and the highest sales record in September in history.

If compared with the previous two months, September was also the highest: 10,775 transactions were completed in August, and 11,081 houses changed hands in July, only 2 less than in September.

The hottest sales in GTA area in September were detached houses and semi-detached houses, with sales up 54.7% and 53% year-on-year respectively; townhouses also rose by 46.9%; and the transaction volume of consistently sold condos only increased by 14.6%.

House prices rose again in double digits

According to the monthly report of the Real Estate Bureau, the price of various homes rose to $960,772 in September, compared with $842,421 in the same period last year, a net increase of nearly 120,000 a year, or 14%.

In the past three months, house prices in the GTA area have increased in double digits. The average price in July was $943,710, and the average price increased by more than 130,000 a year, up 16.3% year-on-year; the average price in August was $951,404, a net increase of nearly 16 a year Million, an increase of 20.1%.

Lisa Patel, chairman of the Real Estate Bureau, pointed out that the active transactions in September were driven by at least two factors. One was the extremely low borrowing cost, and the market stagnated in the spring due to the epidemic, and people’s backlog of demand also led to strong sales.

While house prices continue to rise year-on-year, it is due to the active sales of low-rise houses, which drove the year-on-year price increase, while the current apartment market is relatively quiet.

The Bureau of Real Estate also stated that if compared with the first nine months of last year, housing sales in the same period this year would be 1% higher. This means that the GTA real estate market has fully recovered.

UBS warns of a bubble in the Toronto housing market

According to a report just released by UBS (UBS), according to the UBS Global Real Estate Bubble Index (UBS Global Real Estate Bubble Index), among the 25 megacities in the world in 2020, Munich, Germany, tops the list, Frankfurt second, and Toronto third.

UBS evaluated 25 cities around the world and divided them into four levels: bubble risk, overvalued housing prices, fair valuations, and undervalued housing prices. The higher the evaluation market score, the higher the risk.

With a score of 1.96, Toronto is listed as one of the seven cities with bubble risk; Vancouver has a score of 1.37, falling from the first category to the second category, and is included in the category of overvalued housing prices. Vancouver scored 1.92 in 2018 and was once included in the first category.

In addition, following the Canadian Mortgage and Housing Corporation (CMHC) insisting that Canadian house prices will still fall, by 9-18%, the well-known rating agency Moody’s Analytics and the well-known consulting management company (RPS Real Property Solutions Inc) .) A similar prediction was made in the report released a few days ago: Canadian house prices will fall, and Toronto and Vancouver, the hottest markets, are no exception.

The two agencies predict that due to stagnant economic recovery, weakened government stimulus measures, increased debt problems, and reduced immigration, the average price of various types of houses in Canada will fall by more than 7% in 2021, of which detached houses will fall by about 6.7%.

(Reference link:https://toronto.citynews.ca/2020/10/06/toronto-real-estate-september/;