Toronto saw another year of record sales in 2016 as its housing market continued to gain strength.
There were 113,133 home sales in 2016, up 11.8% from to 2015, according to figures released Thursday by the Toronto Real Estate Board (TREB). This was a second consecutive record year for sales and was fueled by strong demand for condos.
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At the same time, house prices grew at an average of 17.3% to $729,922, as demand continued to outpace the chronic lack of new homes coming to market. Active listings at the end of December were at their lowest point in a decade and a half.
"A relatively strong regional economy, low unemployment and very low borrowing costs kept the demand for ownership housing strong in the Greater Toronto Area, as the region’s population continued to grow in 2016," said Larry Cerqua, president of TREB, in the report.
He was quick, however, to play down concerns that international investment could be driving property prices up as it did in Vancouver, stressing that the majority of demand for Toronto homes was from local buyers.
"It is important to point out that the strong demand that we experienced in 2016 was very much domestic in nature," said Mr. Cerqua, adding that its recent survey of its members found that only 5% of purchases involved a foreign buyer.
Policymakers in Vancouver slapped a 15% sales tax on foreign buyers last year, which has cooled the frenetic growth the market had seen over the past couple of years.
TREB believes that the best way to moderate house price growth in Toronto would be for policymakers to tackle the supply side rather than demand.
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"If we want to see a sustained moderation in the pace of price growth, what we really need is more policy focus on issues impacting the lack of homes available for sale," said Jason Mercer, TREB’s director of market analysis, in the report.