The market has seen the sustained influence of outsized demand and scarcity
While Vancouver stood as the priciest market in Canada for decades, the pendulum shifted to Toronto as of last month, according to a new analysis by RBC Economics.
Preliminary data from local real estate boards indicated that Toronto’s composite benchmark price ($1.26 million) has pulled ahead of Vancouver’s ($1.255 million) in January – a change that RBC described as “a stunning development, though not entirely surprising.”
The surge was impelled by a five-month streak of increases in Toronto’s benchmark price, including a 4.3% monthly increase in January alone. The current trend is showing no signs of abating, RBC said.
“It’ll take more than a spike of COVID-19 cases and a major snowstorm to meaningfully slow down the market,” RBC said. “Active listings ended the month still near historical lows (down 44% y/y). Competition between buyers is as fierce as ever.”
Read more: Canada house prices – what will be the pace of growth this year?
Intensified bidding wars made a major contribution to the 33.3% annual increase in Toronto’s benchmark home price, RBC said.
“Buyers are especially fond of single-family homes (prices are up an astounding 36% y/y, with gains exceeding 40% in Durham and Peel regions) but also increasingly interested in condos (prices up 26% y/y),” RBC said. “We see little that will materially alter these trends in the near term though expect that higher interest rates will gradually cool things down later this year.”
