A new report from Re/Max forecasts that home prices in the City of Toronto will rise by 6 per cent in the coming year.
The increase will make the average cost of a resale approximately $812, 210. Currently, the average resale home price is $880,841 in Toronto, calculated between Jan. 1 and Oct. 31 of 2019.
That price includes both houses and condos.
ReMax attributes its forecasted 6 per cent hike to high employment, a strong local economy and improved affordability. The national forecast come is 3.7 per cent, two percentage points lower than the forecast for the Toronto market.
Christopher Alexander, executive vice-president and regional director of Re/Max, told The Toronto Star: “Anytime you’re in that 5 to 8 per cent range it’s sustainable and it’s good for homeowners — it helps them build some equity,”
Prices, according to the report which was released Tuesday, will rise 5 per cent in 2020 in Oakville, Mississauga and Brampton, and 3 per cent in Durham Region.
The housing markets in Mississauga and Brampton were recently described as “sizzling” in a report released by the Toronto Real Estate Board. Both markets have a shortage of housing and are reported to already be feeling the impact of the soon to be built Hurontario LRT.
No numbers were given for York Region.
Toronto area home buyers have, over the past few years, shown keen interest in the the Niagara Region market. Prices in Niagara have risen 13 per cent between 2018 and 2019. In addition to being within commuting distance of the GTA, Niagara is also popular with GTA retirees.
So it’s no surprise that housing prices in Niagara are expected to rise 7 per cent in 2020, according to the Re/Max 2020 Housing Market Outlook report.
Recent stats from the Canadian Real Estate Association (CREA) found that Niagara has experienced the biggest percentage price jump of any local market in Canada.
Meanwhile, home prices in London, Ottawa and Windsor are forecast to see increases of 5 per cent, 6 per cent and 9 per cent respectively. This more moderate growth comes after those areas previously experienced double digit gains.
“There are a number of people who want to have the urban lifestyle and have access to urban style amenities, so they’re looking at different parts of the province that offer some of what Toronto offers,” Alexander said.
“But there are still more people moving into Toronto than there are leaving,” said Alexander.
He also said that he’s not concerned about talk of a looming slowdown or recession.
“From what we’ve seen in the latter half of this year and the local economy, I don’t even see that having a big effect on most of Canada.”
As for the much discussed impact of the mortgage stress test, a recent Leger survey showed that 2 in 10 Canadians said the test had hindered their ability to buy a home in 2019.
The test demands that home buyers qualify for loans at a rate 2 per cent higher than the banks actually charge them.
Alexander, noting that there is always an adjustment to government policies in the real estate market, said that the impact takes three to five months for it to be felt.
“The stress test numbers were so deep it took longer. It also helped that interest rates went down,” he said.
The online Leger survey of 2,003 Canadians conducted in February is considered to be accurate within 2.2 per cent 19 times out of 20.