February produced a dramatic year over year increase in both residential and condo sales in the Toronto and Mississauga markets Although February 2016 was just the beginning of this round of market growth, 26% year over year in leads to discussions of a bubble. A bubble requires market speculation that prices will keep going up. In this market price increase is caused by a lack of supply as sellers needing somewhere to move do not list. We are down to 13 days on market which can only lead to bidding wars for property. People want to live in the city which has finite properties. A warning from Doug Porter Economist at BMO in the NP on February 17 higher homes prices will impact the economy and is leading to much higher debt ratios. Much as been placed on foreign buyers in the market but as reported today in the NP a recent survey indicates most foreign buyers are buying for educational housing or personal use. In the Star today Mark Rezoni of CBRE indicated at there annual conference that prices are in line with other major cities such as London and New York. Although housing starts are up 13% its is not keeping up with demand.
It is well documented the governments efforts to restrict access to money but it does not solve the demand problem. In Ontario the provincial government needs to free land for development, stream line the environmental restrictions, approvals and development guidelines. Cities need to also adjust zoning and speed up the approval process. The Province and the Feds need to free up money for highways, subways and rail.
Market information is provided by Royal LePage Signature and sourced from the Toronto Real Estate Board.