While warmer temperatures have lingered this fall, there’s no denying there’s a chill in the air.
But not even lower temperatures can cool down the real estate markets in Toronto and the GTA. According to the Toronto Real Estate Board’s “Market Watch” report, the 8,804 homes sold in October, 2015, was the most for any October ever.
The combination of near-record prices and record sales shows that home buyers and sellers remain very optimistic about home ownership and the real estate market in general.
Closer to home, the October numbers for Markham and Richmond Hill are among the healthiest for any area in the report:
- Both Markham and Richmond Hill saw an 8.6% increase in the average price of all types of homes. Markham saw average prices rise to $810,780 from $746,513 a year ago, while Richmond Hill’s prices rose to $774,897 from $712,000 in October, 2014.
- The Markham and Richmond Hill price increases outpaced those in the City of Toronto, which only saw a 6.04% increase in the same period.
- Markham’s total sales to new listings ratio (SNLR) bounced back from a dip in September to reach 62.9% in October. If the SNLR falls too low, it’s a sign that there are more homes on the market than there a buyers for them, which can put downward pressure on home prices.
Low interest rates on mortgages are a main reason for the real estate boom in Toronto-area markets. Mortgage rates are controlled by the Bank of Canada’s key lending rate, which is the amount of interest the central bank charges Canada’s commercial banks to borrow money.
There are few, if any, signs that the Bank of Canada will raise its lending rates any time soon. While real estate markets are healthy, stock markets and the economy in general remain sluggish due to low oil and resources prices. The Bank of Canada is expected to keep the key lending rate relatively low to spur economic activity.
No one can predict the future of the real estate market, but with little reason to think interest rates will rise, it won’t be a surprise if real estate continues its winning ways.