By the end of this year, Toronto home prices are expected to be higher according to a forecast by the Canada Mortgage and Housing Corporation (CMHC).
With an improving economy, it means that average home prices will reach $384,120 by the end of 2009, which will be up 1.1% from 2008 noted the federal housing agency.
What we saw in an earlier forecast by the CMHC was that home prices were expected to decrease to $360,000 by the end of 2009.
We are seeing a huge recovery in the housing market, which was not expected by many.
Although 1.1% is the smallest increase seen in more than a decade, it would still mean that house prices have gone up every year for the past 13 years.
The only problem currently is the lack of supply on the market. With the lack of supply in both new listings and active listings, 11% and 31% respectively, the level of demand is not being met, which putting pressure on the prices is raising it even higher than expected.
In the Toronto area, the low interest rates and tight inventory is contributing to the increase in prices. It is expected that the lack of inventory will ease in the second half as more vendors will be placing their homes on the market.
With greater affordability, it means that more expensive single-detached homes were purchased in the second half of the year, pushing the prices upward in Toronto.
The housing maker is expected to strengthen in the second half of 2009 and 2010.
The average price of a home across Canada in 2008 was $303,607 and is expected to fall around $301,400 in 2009, before climbing to $303,300 in 2010.
Nelson Goulart
Broker of Record with Signature Service GMAC Real Estate
www.ssgmac.ca
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