The board reported yesterday that April had 9,452 sales – the most recorded for a single month in the history of the board, and up 13 per cent over April 2006. Four months into the year, sales are up 5 per cent over last year.
"The Greater Toronto Area's resale housing market has showed sustained strength and these phenomenal numbers bode well for the remainder of this year's spring market," TREB president Dorothy Mason said.
This time last year economists didn't expect the Toronto market, which is in its tenth year of appreciation, to perform this strongly.
Rising interest rates, higher housing costs and a slow down in demand from first-time buyers was supposed to put a crimp in the real estate party.
But that hasn't happened so far, despite a major implosion of the housing market in the United States, which has so far left Canada unaffected.
Despite the torrid pace, housing price appreciation in the Toronto area was moderate. Average prices in April of $379,025, were up only 3 per cent from April 2006, or just above inflation. More listings, both for new and resale homes, have resulted in a more competitive market.
Housing economist Will Dunning said in an interview that mortgage rates dipped temporarily during March, which may have given a small boost to demand, but "overall, it's the same story that there is very strong growth in the high-income service industries, which is putting a lot of people into position to move up in the housing market."
Dunning is forecasting an average annual price increase of 3.4 per cent from 2006 to 2010. He sees the resale market weakening in the second half of this year due to weaker employment growth and reduced housing affordability from higher house prices. The mortgage interest cost for an average priced resale is now at the highest level in more than a decade.
The new housing market, meanwhile, will not fare as well as the resale market, forecasts Dunning in a report released this week. The analyst expects 35,952 new homes to be sold this year, below the 40,000 sold last year.
The economist has warned there is a danger of too much speculation in the condominium market.
However, he was encouraged to see "risks in the condo investment market are being reduced" as newly completed investor units are being absorbed.
Still, a large influx of new units over the next six to nine months will "test the capacity of the market," he predicts.
Toronto real estate. RESALE MARKET IN TORONTO IN APRIL 2007
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