Greater Toronto real estate prices are seeing high growth accelerate even faster. Toronto Regional Real Estate Board (TRREB) data shows a new record high for home prices in April. Detached home prices are now up six-digits from last year. The big story is condo apartments though. The segment had been lagging the general market over the past year. After the Government said falling prices are unacceptable, condos saw 3x the rate of monthly growth of detached homes. FOMO has now spread across all market segments.
Greater Toronto Home Prices Are Up Over 17%
Greater Toronto real estate prices ripped higher, with growth further accelerating. The composite benchmark hit $1,025,200 in April, up 1.75% ($17,600) from a month before. Compared to the same month last year, this is 17.83% ($155,100) higher. Yes, home prices could grow faster, even at these levels.
Greater Toronto Benchmark Price
The price of a “typical” composite home across Greater Toronto.Source: TRREB. Better Dwelling.
Composite home prices are growing at the fastest rate since the non-resident “mini-bubble.” The 17.83% annual growth in April is the highest since July 2017. It also happens to be the 33rd consecutive month of annual price growth.
You may have noticed composite price growth made a sudden acceleration after January. This would be right after the Bank of Canada indicated the growth was welcome. Price support was followed by the Federal government vowing to backstop prices. If you consider homebuyers exuberant, it isn’t a conclusion they made themselves. It was actively encouraged by the central bank and Government.
Toronto Detached Home Prices Are $245,000 Higher Than Last Year
Greater Toronto detached homes are quickly becoming just a fantasy for young adults. The detached benchmark reached $1,259,500 in April, up 1.01% ($12,600) from a month before. Compared to the same month last year, prices are now 24.22% ($245,600) higher. Yes, detached homes made more than the median family… more than twice, actually.
Greater Toronto Benchmark Price Change
The annual percent change of TRREB’s benchmark price for all home types.Source: TRREB. Better Dwelling.
The annual rate of price growth is also the highest in years, but finally showing an arc. The 24.55% annual gain in April is the highest rate since June 2018. If you look at the chart, you can see the top of the growth rate beginning to form a hook, or arcing. This could potentially indicate a deceleration on the horizon. Although a lot of deceleration would be needed to bring prices lower.
Only five months of growth in the past decade have exceeded this level. However, price growth can be cut in half, and would only fall to the same level the U.S. is seeing. The U.S. is currently considered bubbly at its current level. If that’s bubbly, I’m not sure what American analysts would consider Canada’s rate of growth.
Toronto Condos See Monthly Price Growth 3x Detached Homes
The real story here is condo apartment prices, which made a monster move over the past month. The condo apartment benchmark price hit $627,600 in April, up 3.31% ($20,100) from a month before. Compared to a year ago, home prices are now 4.83% ($28,900) higher. The annual rate may seem small, but it’s quite substantial. It only seems small in contrast to price growth across Canada these days. That’s how skewed prices are.
The annual rate of price growth was decelerating towards zero until February. After that point, buyers were likely emboldened by the BoC and Federal government. The price trend abruptly reverses for condos, and jumps 3x that of detached homes. April’s increase alone is 69.5% the size of the annual increase. This also happened after the Federal government said they would consider any price drop to be unacceptable. Must be a coincidence.
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