The market has seen the sustained influence of outsized demand and scarcity
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While Vancouver stood as the priciest market in Canada for decades, the pendulum shifted to Toronto as of last month, according to a new analysis by RBC Economics.
Preliminary data from local real estate boards indicated that Toronto’s composite benchmark price ($1.26 million) has pulled ahead of Vancouver’s ($1.255 million) in January – a change that RBC described as “a stunning development, though not entirely surprising.”
The surge was impelled by a five-month streak of increases in Toronto’s benchmark price, including a 4.3% monthly increase in January alone. The current trend is showing no signs of abating, RBC said.
“It’ll take more than a spike of COVID-19 cases and a major snowstorm to meaningfully slow down the market,” RBC said. “Active listings ended the month still near historical lows (down 44% y/y). Competition between buyers is as fierce as ever.”
Read more: Canada house prices – what will be the pace of growth this year?
Intensified bidding wars made a major contribution to the 33.3% annual increase in Toronto’s benchmark home price, RBC said.
“Buyers are especially fond of single-family homes (prices are up an astounding 36% y/y, with gains exceeding 40% in Durham and Peel regions) but also increasingly interested in condos (prices up 26% y/y),” RBC said. “We see little that will materially alter these trends in the near term though expect that higher interest rates will gradually cool things down later this year.”