Super low mortgage interest rates and a GTA economy that is performing quite well are contributing to a record year for real estate sales, according to the Toronto Real Estate Board (TREB).
The unemployment rate is lower than last year, which means "home buyers remain confident in the long-term benefits of owning a home," says TREB president Mark McLean. But the low rates don't hurt either. Mortgage rates have fallen in recent years to less than half of their historical averages and few forecasters expect a reversion to 'normal' levels anytime soon, reports TD Economics.
Across the GTA, homes spent an average of 22 days on the market and sold for 100 per cent of the listed price. There are still multiple offers for the most sought-after properties. In the City of Toronto, the average detached home sold for just over $1 million. Semi-detached homes averaged $570,480 in August, while condo apartments sold for an average price of $406,587, up 9.5% from the same period in 2014.
"With the level of inventory in the GTA trending below two months, many listings continued to generate a lot of interest from buyers. Not surprisingly, this supported further price increases well above the rate of inflation," says Jason Mercer, TREB's director of market analysis.
Mercer believes that unless there's a change in the economic conditions during the next five months "strong price growth will remiain the norm for the rest of 2015."
The TD Economics report states that when speculative activiity - or investors chasing short term capital gains becomes a leading influence in the market, it can lead to a correction. However, the report continues "surveys suggest a buy-and-hold strategy has remained the popular choice."