The housing market in Toronto continues to gain traction as the city continued to see significant price appreciation in the first quarter of the year.
In the G-T-A, the average residential sale price during the first quarter of 2016 rose 14 per cent to $675,492, when compared with 2015. In Vancouver however, the average residential sale price in the first quarter of 2016 rose 24 per cent, while single-family homes in the city of Vancouver crossed the $2 million threshold.
The competition in both Toronto and Vancouver among buyers has discouraged sellers from listing their properties, thus further reducing inventory. While sellers know their homes would be quick to sell, many are reluctant to become buyers themselves and enter the highly competitive market. Also, some potential sellers are hesitant to list their homes believing that home prices could appreciate further. However, not all Canadians can wait out the housing market as many are relying on their homes as a source of retirement income. According to a recent RE/MAX poll conducted by Leger, 56 per cent of Canadians 55-64 who are considering selling their homes are doing so to release equity for retirement.
“The ripple effect on the housing markets outside of Toronto and Vancouver is quite significant when you look at the Canadian housing market overall,” said Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “As a result, when you remove Toronto and Vancouver from the equation, the national average house price still rose approximately 10 per cent in the last year.”
Outside of Vancouver and Toronto, surrounding regions continue to experience a spillover effect as buyers move farther out in search of affordable single-family homes.