Toronto-Area Detached Home Prices Surge Above $1 Million, Out of Reach of First-Time Buyers

It doesn’t matter where you go in the greater Toronto area, the price of a detached home is soaring faster than the rest of the market with the situation showing no signs of abating, according to new data.

September sales results from the Toronto Real Estate Board show the average price of a detached home reached $1,053,871, a 10.7 per cent increase from a year ago.

Jason Mercer, TREB’s director of market analysis, said new listings or supply have started to increase in the GTA, but total active listing are still down from a year ago. “Expect strong rates of price growth to continue through the remainder of 2015 and into 2016,” he said, in a release.

All of this could be bad news for first-time buyers trying to scratch together enough money to buy a detached home. A survey released Monday from local Toronto brokerage Re/Max Hallmark Ltd. found 32 per cent of buyers over the next 18 months in the GTA will be of the first-time variety.

According to the survey, those first-time buyers will spend on average of $455,000 with the average down payment 22 per cent. Changes to the Home Buyers’ Plan, which lets consumers withdraw up to $25,000 from their registered retirement savings plan without penalty, should help those first-time buyers.

The Re/Max Hallmark Ltd. study found 50 per cent of first-time buyers will utilize their RRSP to buy that home. The Harper government has pledged to increase withdrawal limits to $35,000, something critics say could be inflationary for prices.

Reference: Business Financial Post

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