The first quarter of 2010 was a record buster.
According to the Toronto Real Estate Board, March resale housing sales of 10,430 pushed first-quarter totals to 22,418 – a record under current TREB boundaries. Buoyed by a jump in average prices in March to $434,696, the average price for the first quarter was $427,948 and other indicators followed suit. March new listings increased by a whopping 42% year over year and that significant days-on-market figure dropped 50% in March 2010 compared with the same period last year.
By all accounts we’re in a very warm, if not hot, housing market, and that’s a positive sign that the GTA economy is bouncing back. But will it continue?
Over the past several months, everyone from the Bank of Canada to the guy at the corner grocery store has insisted that interest rates will increase. Now predictions are coming true. In late March several banks hiked their mortgage rates, with industry experts predicting a 1.5% increase within the next year.
What will this do to the hot housing market? According to TREB, home prices in the GTA will continue to increase during 2010, but the rate of growth will slow, beginning now. Will those all-important first-time buyers feel even greater pressure to get into the housing market now before it’s too late? Or will they back off, fearing higher and higher carrying costs?
That’s anyone’s guess. But it does look as if the current GTA real estate market is no longer ‘too hot not to cool down’
