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Toronto expected to see biggest housing price increase in Canada this year

Alexandra Posadzki – The Canadian Press

Royal LePage says the price of a Canadian home is expected to rise by a relatively modest 2.9% on average in 2015 as price appreciation slows across the country.

Toronto is expected to lead the pack when it comes to price increases this year, with the realtor saying the average home price in Canada’s largest city is forecast to rise by 4.5%, although that would be well behind last year’s pace.

Comment: Yeah… I called for 3-5% last year and it was over 8%. Curious to see what 2015 brings.

Toronto housing prices
Vancouver is expected to see the second-biggest average jump in prices, up 2.8%, followed by a 2.4% gain in Calgary, 0.6% in Montreal and 0.5% in Halifax among several of the major centres surveyed across the country.

The realtor says economic factors, including the plummeting price of oil, are likely to cause home prices to grow at a slower pace, particularly in Western Canada.

Comment: Actually, falling oil prices won’t really affect housing prices. Maybe there will be a slight slow down in Alberta, but that is it. Low gas prices might actually cause real estate activity to increase, as consumers find more money in their pockets.

In 2014, prices for detached bungalows rose the most, up 6.7% on average across the country in the fourth quarter compared with a year earlier, followed by an average 6% gain for two-storey homes and 4.5% for condos.

Edmonton’s condo market saw the biggest increase, shooting up 12.2% to an average of $250,953 per unit. Prices in Calgary also ballooned, with standard condos shooting up 9.1% year-over-year to an average of $311,644 in the latest quarter.

In Toronto, prices of detached bungalows increased by 11.6% from a year ago to an average of $647,535, while prices of two-storey homes advanced 8.6% to an average of $745,062.

Comment: In the GTA you mean. In just the 416, those prices would be in the $1 million range.

In Vancouver, the average price of a detached bungalow and of a two-storey home each grew by more than 7%, to an average of $1,124,642 and $1,233.182 respectively.

Home prices remained relatively flat in Winnipeg and softened in Regina, where the average price of two-storey homes dropped 6.8% year-over-year to $345,000.

Comment: So when we talk about Vancouver and Toronto skewing prices upward, we have to remember Regina, which skews the average downward.

Royal LePage predicts that prices will continue to accelerate rapidly in Toronto in 2015 for a variety of reasons, among them a surge in demand for Ontario’s exports thanks to the lower loonie and the robust economy south of the border.

Labour market trends and unsatisfied demand from prospective homebuyers who were outbid in 2014 will also fuel higher home prices in the Toronto area.

Meanwhile, the sharp decline in the price of oil will slow the growth in home prices in Western Canada, according to the report.

Royal LePage says a potential interest rate hike and possible changes to mortgage rules by the federal government could also pose risks to the country’s real estate sector if they materialize.

Comment: Both are only “maybes“, the same possibilities everyone trots out as a warning.

“Ultimately the biggest threat to the Canadian housing market is a decline in consumer confidence, which could result from worsened employment prospects or decreased purchasing power, be it real or perceived,” president and chief executive Phil Soper said in a statement.

Comment: Except there is no real or perceived worsening employment prospects or purchasing power. Contrary to all the negative press, the average consumer is behaving rationally and following the reality that is around them, not the doomsday scenarios of the media.

“In this light, we will be watching market developments closely in the regions most negatively impacted by oil price declines, such as Alberta, Saskatchewan and Newfoundland.”

Buyers in western Canadian cities could benefit from lower prices in the short term, but Soper says the trend is unlikely to last.

“Over the longer term, we foresee a return to regional home price appreciation that is above both the historical average and national trends in general, when energy markets recover,” he said.

“In the interim, slowed growth in the price of homes will be a welcome sign for many people in the West, especially in pricey markets like Vancouver where first-time buyers have been frustrated by a hyper-competitive market and home prices that have escalated at a feverish pace.”

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Contact Laurin Jeffrey for more information – 416-388-1960

Laurin Jeffrey is a Toronto real estate agent with Century 21 Regal Realty.
He did not write these articles, he just reproduces them here for people who
are interested in Toronto real estate. He does not work for any builders.

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Summary
Toronto expected to see biggest housing price increase in Canada this year
Article Name
Toronto expected to see biggest housing price increase in Canada this year
Description
Toronto is expected to lead the pack when it comes to price increases this year, with the realtor saying the average home price in Canada's largest city is forecast to rise by 4.5%, although that would be well behind last year's pace.

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