Recent stats from the Toronto Real Estate Board show that the average price of a Toronto mortgage is now over $800,000. TREB actually states that the average price right now in TO is $805,308. But is that really right?
If it is, that would mean that Toronto home prices were up by an incredible 17 per cent when compared with the same time last year. It would also mean a huge leap from the $500,000 average home price that Toronto was seeing in June. And this at a time when the market is supposed to be cooling due to the new mortgage rules! So are these facts really real?
Well, they are and they aren’t. Firstly, you can never really doubt anything that comes out of the TREB office, because they are the leaders in the industry. Especially when it comes to the Toronto real estate market. Still, that doesn’t mean that you can’t question the data. Or wonder how they came up with it.
As we discussed on this blog a few days ago, there are a few different ways to come up with the average home price. TREB comes to theirs by adding together how many homes were sold, the price of each of those homes, and then dividing the total price by the number of homes. It’s the way most of us get our averages, and it seems to be a good one. Unfortunately, in this case it’s just not enough.
In this particular case it was most likely a case of a few luxury homes, costing $1 million or more, that skewed the average price of a home so high.
What it could also indicate is that the inventory of single-family homes is becoming fewer and fewer, even though a lot of people are still interested in buying.
But going by the Teranet-National Bank composite home price index, you might get a more realistic picture of what’s going on in Toronto. This index looks at repeat sales on a single home. These averages show that home prices in Toronto did jump, but not quite as dramatically as TREB shows.
These figures show that Toronto home prices jumped by 8.3 percent over last year. And that the average price of a home in the city is now $536,128. But, let’s remember that’s single-family homes. You can still get a condo for an average price of $352,851.
Either way you look at it though, home prices in Toronto are still up. And this shows that while Ottawa’s new mortgage rules may have cooled the market in much of Canada, Toronto’s still as hot as ever!
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