Home prices in Toronto are expected to surpass even Vancouver's this year

Stakeholders say Toronto's housing market is closing in on years of high interest rates, with median home prices surpassing Vancouver's to become the highest in the country as the city recovers from last year's relative calm amid high interest rates. .

Royal LePage's latest update and forecast released Friday predicts that the value of a typical piece of real estate in Canada will increase by nine percent by the end of the year compared to the same time in 2023.

It's especially bad in places like the Toronto area, which not only sees the fastest rate of price growth, but also has the highest rates of any Canadian city.

According to the report, aggregate home values ​​in the GTA will increase 10 percent year-over-year to $1,235,630 in the final quarter of 2024, surpassing Calgary, which is on track to claim the fastest-growing title. rise in real estate prices.

The Montreal area is seeing a similar but somewhat smaller boost, with prices rising 8.5 percent year-over-year (to just $614,978).

And Vancouver home prices will rise by an average of 5.5 percent. While that figure for the quarter averaged $1,287,205, Royal LePage says at some point during those three months, “the lines will cross and Toronto home prices will be ahead of Vancouver prices.”

Factors pushing higher include “chronically low” housing stock in cities across the country, lower interest rates coming at the end of the year and prospective buyers' acceptance of currently high rates.

“It's clear that more buyers are driven by the need to get ahead of rising home prices than by adopting a strategy of waiting for mortgage rates to fall,” Royal LePage analysts write.

For Toronto, they added, this year has been “more than expected” so far despite high prices and interest rates, despite the city's significant lack of affordability.

“What we've seen so far this year is higher-than-expected sales volume and price growth. We should see a seasonal uptick in activity in the spring market and an even sharper decline.”

Lead photo

Prestigium Real Estate Ltd./Strata.ca