Doomsday forecasts for the last few years have been way off the mark with respect to Toronto real estate sales market. A shortage of homes coupled with foreign buyers, renters squeezed out of the rental market, and first time buyers eager to get a home, along with migration outward from Toronto have generated plenty of sales activity.
“Buy land. They’re not making it anymore.”
Perhaps the biggest factor driving prices through the roof is the lack of available land for residential building. In York and Durham region there is a huge amount of scrub land, but it isn’t being zoned for development, other than for small developments in Aurora, Bradford, Oak Ridges, King City, Richmond Hill, and Stouffville. There’s been a noticeable increase in the number of luxury homes being built in the Whitchurch-Stouffville and Uxbridge zones.
Scarcity is likely a factor in the GTA condo boom, although there are other factors at play there. While condo sales are cooling off, other types aren’t.
Home Sales in York/Durham Regions
As the screenshot from TREB’s market report shows, sales volume keeps rising and this was a year that was supposed to be flat. Despite a lagging economy, sales in May were higher than May sales from previous years.
|Area||May 2014 Avg Sales Price||May 2013 Avg Sales Price|
The most shocking rise is in the Uxbridge area where average sales prices have jumped by about $170,000, from last May. That figure is a little misleading since many of the homes built are high priced luxury homes. This area is definitely in demand from upscale buyers.
Your guess is as good as mine about whether real estate values will continue rising. Many suspect they will and home renovation projects will grow due to HELOCS and low interest rates.
If the Ontario economy should begin to grow, inflation and high home prices are almost a certainty given the lack of available land for residential development. It’s not hard to imagine very strong rises in prices should the US economy really take off. Our economy is highly dependent on exports to the US. US economic numbers lately are very good. Read the CMHC’s report on economy growth.