Toronto real estate market stays hot
By Tony Wong – Toronto Star
The Toronto real estate market is on the way to a recovery, although an undersupply of homes is leading to bidding wars, says a report by Royal LePage released today.
The activity in the existing homes market is spilling over into the new homes sector, where housing starts surged in September by a seasonally adjusted and annualized 25% from a month earlier, according to figures also released today by the Canada Mortgage and Housing Corporation.
“The sharp recovery in real estate demand is beginning to work its way into the residential construction sector in Toronto,” said Shaun Hildebrand, CMHC senior market analyst.
Both single-detached homes and multiple-family homes, which includes condominiums, showed an improvement. A home is considered “started” once the concrete foundations are poured. Starts for single detached homes, considered a key segment rose to their highest level of the year.
“Residential construction will be firing on all cylinders as we head into 2010,” said the CMHC.
The Toronto uptick broke the national trend, which saw starts down by more than four per cent across the country.
In a separate report by Royal Lepage, Toronto home prices for detached homes and bungalows are up slightly from a year ago, but condominium prices are down.
The price of an average existing bungalow increased barely, to 0.8% or $436,857 compared to the same quarter last year.
A standard two-storey home is up in value to $561,725. However, average prices for a condominium dipped by 3% to $300,526 according to the real estate company.
“The economic recession interrupted the flow of the real estate cycle, but it is essentially back on track,” said Phil Soper, president and CEO of Royal LePage. “There is an illusion of a boom in the market, but in fact what we are experiencing is the end of a normal, short term correction.”
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