"Interest in single-detached homes has been very high, both in the City of Toronto and surrounding regions. Growth in single-detached listings has not kept up with demand, which means competition between buyers in this market segment increased. With this in mind, it was no surprise that the strongest annual price increase was also experienced in the single-detached segment," said Toronto Real Estate Board President, Richard Silver.

The average price for April 2012 transactions was $517,556 – up 8.5 per cent compared to April 2011. While price growth was strongest for single-detached homes, the better-supplied condominium apartment segment experienced a more moderate annual rate of price growth, at four per cent.

"Monthly mortgage payments remain affordable for home buyers in the Greater Toronto Area. While interest rates are generally expected to increase over the next two years, the extent and timing of rate hikes has been thrown into question by slower than expected economic growth in the first quarter of this year. On net, borrowing costs are expected to remain a positive factor influencing home sales through 2012," said Jason Mercer, TREB’s Senior Manager of Market Analysis.

Source: Toronto Real Estate Board Market Watch, April 2012

For full report, click here

The Royal LePage House Price Survey released April 5, 2012 showed the average price of a home in Canada increased between 2.2 and 5.0 per cent in the first quarter of 2012, compared to the previous year.

Market activity in the first quarter of 2012 was unusually high resulting in tight inventories and strong price appreciation in most major cities. Buyers were attracted into the market by historically low mortgage rates and sellers brought listing inventory to market earlier than normal, encouraged by unseasonably warm weather.

In the first quarter, standard two-storey homes rose 5.0 per cent year-over-year to $398,282, while detached bungalows increased 4.4 per cent to $356,306. Average prices for standard condominiums increased 2.2 per cent to $243,153.

“Our housing market is being pulled in opposite directions by opposing economic forces,” said Phil Soper, president and chief executive of Royal LePage Real Estate Services. “On one hand, there is the rapidly strengthening U.S. economy, increasing Canadian consumer confidence and what can only be called a national mortgage sale encouraging activity and bidding up home prices. On the other, we have signs of over-shooting values and strained affordability in our largest cities. We are likely to see much more modest price appreciation as the year unfolds.”

Price appreciation and strong unit sales reflect Canadians taking advantage of borrowing rates that for the first time fell below 3.0 per cent for a five year fixed mortgage and a banking environment that the Royal Bank of Canada has referred to as “hyper-competitive.”

Soper commented that the effect of low mortgage rates is more pronounced in cities that are affordable such as Winnipeg, Ottawa and St. John’s.

“In Vancouver, the average price of a standard two-storey home is now $1,182,250. Although the city posted strong year-over-year price gains in the first quarter, we expect to see Vancouver’s housing market to reach a level of price resistance. Although desirability is high, many potential buyers have simply been pushed out of the market and cannot take advantage of low mortgage rates, which will ease demand and should bring price relief,” said Soper.

In comparison, Soper commented that he did not expect price resistance to affect Toronto’s housing market where a standard two-storey home would sell for $645,467.

Another notable exception was Calgary whose flat year-over-year house price appreciation masked a very active housing market that witnessed double digit growth in unit sales compared to the same period in 2011.

Across the country, consumers sought to buy into what they believe is a good investment market. The Conference Board of Canada’s consumer confidence index continued to rise in March, gaining 4.3 points to stand at 79.5, its third consecutive month of gains, and attitudes towards major purchases, such as real estate, were particularly strong.

Soper concluded, “Generally when the market witnesses a surge in unit sales activity in the first half of the year, it borrows from the second half as potential buyers jump in early to take advantage of a favourable environment.”

Click here for the full article including Regional Summaries.