Toronto climbs on the bandwagon as housing market heats up

Number of existing homes sold in GTA rises 21 per cent in August from year ago, joining strong results from Vancouver and Calgary.

The number of existing homes that changed hands in August in the Greater Toronto Area was 21 per cent higher than a year earlier.

The figures come after Vancouver's local real estate board reported a 52.5 per cent year-over-year jump in sales during August, and Calgary posted a 27.5-per-cent increase. The numbers suggest that the housing market is strengthening in the wake of a protracted slump.

Bank of Montreal economist Sal Guatieri notes that Victoria's home sales came in 20.7 per cent higher than a year earlier, and Edmonton's 9.9 per cent. All told, "Canadian existing home sales could climb around 10 per cent year-over-year with average prices rising about 7 per cent year-over-year (pulled up by the sharp sales rebound in pricey Vancouver)," he wrote in a research note.

"After last year's plunge in response to tighter mortgage rules, home sales have stabilized near normal levels and prices are rising moderately in most regions – a near perfect soft landing with shades of taking flight again," he wrote.

It was in July of 2012 that Finance Minister Jim Flaherty tightened the mortgage insurance rules, including cutting the maximum amortization of an insured mortgage to 25 years from 30, which led to a steep slump in sales. Sales were lower at this time last year as a result, and that's helping to make the current year-over-year gains look larger. 

But the numbers nevertheless show that the market is rebounding from its lengthy slide.

Even sales of existing condos in Toronto's downtown core, one of the markets in the country that economists and policy-makers have been most concerned about, rose 21.4 per cent in August compared to a year earlier. 

Those condos changed hands over the Multiple Listing Service in the face of a large number of newly-constructed residential towers that are coming on stream. And their average selling price on the MLS was $357,572, 2.3 per cent higher than a year ago.

The average selling price for all types of homes in the Toronto area was $503,094, up almost 5.5 per cent from a year ago. The MLS Home Price Index, which seeks to account for any changes in the mix of homes that are selling, was up by 3.7 per cent.

By Tara Perkins