Toronto Housing Market Showing Signs Of Bottoming Out

Toronto Housing Market Showing Signs Of Bottoming Out

New figures from Zoocasa and TD Bank show that Toronto's housing market is bottoming out and could be returning back to normal rates of growth.

If Vancouver's spectacular boom, sharp slowdown and rebound is any guide, the cool-off in Toronto may not last. Having slowed sharply due to stricter government measures, demand has already bounced back in Vancouver.  The average price for all home types was 8.7 percent to just over US$1 million in July compared with the previous year.  House price inflation there is expected to accelerate further to 10.5 percent this year, more than double the pace estimated in May.

While most analysts said they didn't yet have enough data to corroborate whether Toronto would go the same way, their base case scenario was that it would.  Supply constraints are also likely to resume pressuring the market higher, economists said.

"The beginning of a decline in listings reinforces our view that home prices in the Greater Toronto Area won't decline substantially from now on.  Resale transactions are at their lowest level since the financial crisis but employment is at an all-time high," said Sebastien Lavoie, chief economist at Laurentian Bank Securities.  Canada's unemployment rate fell in July to 6.3 percent, its lowest since October 2008 when the global financial crisis was just starting to take hold.  A slower pace of homebuilding nationally is also expected to lead to further house price gains.

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Phone: 905-409-6730
Dated: September 27th 2017
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