Toronto home prices inch up as buyers adapt to mortgage rate landscape

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Home sales up 18% from a year ago

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Toronto area home sales jumped by 17.9 per cent year over year in February while benchmark home prices inched up slightly, according to monthly figures released Mar. 5 by the Toronto Regional Real Estate Board.

A total of 5,607 properties changed hands during the month, while new listings surged by 33.5 per cent.

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Data from the real estate board showed the benchmark home price increased by just 0.44 per cent year over year to $1,093,900.

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TRREB President Jennifer Pearce said a recent resurgence in sales activity came as buyers have adapted to the mortgage-rate landscape.

Toronto benchmark home price chart

“Consumers are now anticipating rate cuts in the near future…. A growing number of homebuyers have also come to terms with elevated mortgage rates over the past two years,” Pearce said. “To minimize higher monthly payments, some buyers have likely saved up a larger down payment, chosen to purchase a less-expensive home type and/or looked to a different location in the GTA.”

John Lusink, president of Right At Home Realty and RealServus, which operates multiple real estate listing websites, said that despite the persistence of high interest rates, traditional market activity has resumed.

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“I checked in with our and tech people and, you know, we’ve seen an increase in viewing requests,” Lusink said. “Just just over the last few weeks, up 42 per cent. And then you add to Right At Home, the number of showings since the beginning of January is up by 32 per cent. This shows that traditional activity is back in full force.”

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Pritesh Parekh, a Toronto realtor, said that although there was a noticeable increase in new listings from January to February of this year, it was not as dramatic as the 54 per cent increase experienced during the same period last year.

Parekh believes the February uptick was a typical seasonal move at a time when buyers and sellers traditionally re-engage with the real estate sector as the winter weather subsides.

TRREB sales, listings chart

“No matter which way you cut it, no matter how the market is performing in a given year, seasonality is going to continue and I see it in my own circle of clients constantly,” he said. “December to January, I don’t know where everyone’s gone. Then by Feb. 1, I start getting so many phone calls from potential clients.”

Parekh said the only factor that could significantly alter the current state of the real estate market lies within the control of the Bank of Canada.

“I think the entire spring market heavily hinges on the next Bank of Canada rate decision,” Parekh said.

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