‘Demand isn’t going away’: Toronto-area real estate board expects prices to jump 12 per cent this year, with fewer first-time home purchases

The Toronto area’s blistering home prices are expected to climb another 12 per cent this year, bringing the average selling price of a house or condo to $ 1.23 million, according to the Toronto Regional Real Estate Board (TRREB).

“Demand (for housing) is not going away and will likely accelerate over the next year,” says the board’s annual forecast report released Thursday.

It predicts fewer buyers and sales in 2022 but also a continuation of the supply shortage that helped drive up home prices about 18 per cent last year over 2020 to an average of $ 1.01 million. The real estate board had been predicting only a 10 per cent price gain at the beginning of 2021.

“There still exists a vicious circle where homeowners will decide not to list because they fear they will not be able to find another home that meets their needs,” said the board’s 2022 market outlook and 2021 year-in-review report titled “The Post -Pandemic Future: Communities, Housing and Employment. ”

Because so many people used pandemic savings and historically low interest rates to buy last year, the real estate board is anticipating about 110,000 home sales this year, down from about 120,000 in 2021.

Even though an anticipated rise in interest rates this year would normally slow the housing market, TRREB expects relatively few home buyers to step out of the market. Buyers are already forced to qualify for rates higher than banks are charging so most will be shielded from the impact of higher borrowing costs, says the real estate board.

Any drop in demand due to rising rates will also be mitigated by high immigration rates, the board said.

Ipsos polling for the real estate board showed fewer people expect to buy homes this year, particularly first-time buyers.

Detached houses in the suburbs remained the homes highest in demand among those who expected to buy this year. But in the city of Toronto, condos attracted the most interest, making it possible the city will be the exception to the downward trend in first-time home purchases.

The average selling price of a home in the Toronto region rose 25 per cent year over year in January to $ 1.24 million, TRREB also reported on Thursday.

Although the largest annual price growth continued in ground-level housing – detached, semi-detached and townhouses – condos prices were gaining last month, rising 24.5 per cent to $ 748,566 on average.

Detached houses in the Toronto region sold for an average of $ 1.74 million. In the city of Toronto, those homes sold for $ 1.89 million on average, compared to $ 1.7 million in the 905 areas.

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