Average Toronto region home price projected to rise $50,000
Photo: James Bombales
Despite a summertime home sales slowdown, property prices across the Toronto region are only projected to keep climbing into the fall.
In July, the number of home sales dropped 14.9 percent annually, the first year-over-year decline recorded in 2021 so far, according to Toronto-based brokerage Zoocasa. Meanwhile, the average home price increased 12.6 percent annually to $1,062,256 during the same month, the smallest rate of price growth for the year.
Yet, new market predictions released this week by Zoocasa claim that prices will continue to rise in the months ahead.
Using 10-year historical data, Zoocasa projected in a new report published this week that the average home price in the GTA is on track to hit $1,114,387 by October. This would be an increase of 4.91 percent from July, or about $52,131.
On the low end of the scale, Zoocasa forecasts that prices will climb as little as 3.61 percent ($38,381) to $1,100,647 between July and October. But on the flip side, prices could rise as high as 6.18 percent ($65,623), soaring to $1,127,879.
During the same four-month period, the brokerage anticipates that sales volume will drop 1.38 percent to 9,260 transactions on average, with 130 fewer homes exchanged on the market. At the lower end of the range, the number of sales could decline 7.57 percent to 8,679 transactions, or at the higher-end, jump 5.25 percent to 9,882 sales by October.
Although market conditions have cooled off, July is still considered to be an above-average month with sales 9.2 percent above 2019 levels. A lack of homes available for sale is one of the main challenges facing GTA buyers these days, Zoocasa agent Mina Chand explained in the report.
“The very reason that the sales have decreased is the cause of competition in the market for my buyers,” she said. “Today’s low sales are due to low inventory and not lack of demand.”
Chand added that not every home listed on the market is receiving the same amount of traction. With prices back to back to “cyclical increments” and interest rates still very low, buyers are taking their time with selecting the right property.
“Listings that are high in demand due to their location, school rating, and accessibility are low in supply and, therefore, have more competition,” said Chand.
To calculate these predictions, the brokerage analyzed sales and pricing data for the summer (between June and August) and the fall (September to November) from 2010 to 2020. The percentage difference between July’s historic low point and October’s historic high point was then calculated for average price and sales volume each year, both of which were then applied to July 2021 price and sales data to predict the same data sets for October 2021.
By averaging the percentage differences in the top-five and bottom-five years, and applying those results to July 2021, Zoocasa calculated a high and low range for the period between July and October.