| oronto real estate market is still going strong in 2006. | | | | in the Toronto resale market. That bubble burst |
| While annual growth in property value has not been | | | | abruptly and prices of some homes dropped by as |
| as spectacular as in Vancouver, is it still a respectable | | | | much as 25 per cent. Many of them have still not |
| average of 6%, and there are hot neighborhoods all | | | | climbed back to their 1989 values. However, this |
| across the city where growth is much stronger. The | | | | boom is predicted to be more lasting, as the housing |
| average price of a home in Canada is expected to | | | | market of the late 1980s was artificially inflated. |
| rise by 5.5 per cent this year, to $262,700. In 2005, | | | | Today's conditions are the result of deeper economic |
| there were 84,145 real estate sales in Toronto, | | | | factors such as affordable interest rates and low |
| according to the Toronto Real Estate Board. These | | | | unemployment. |
| statistics include lofts, townhouses, condos and | | | | Professional real estate investors are backing off the |
| homes. In 2006, activity in the Toronto real estate | | | | market, as it currently favors sellers. However, for |
| market is up 10 per cent compared to 2005. | | | | the average home buyer, the Toronto market still |
| In the Toronto market, houses in the most popular | | | | offers affordable housing, which is disappearing in the |
| neighborhoods are being sold for more than the | | | | Vancouver and Calgary markets. In the red-hot |
| asking price, and often there are multiple offers for | | | | Vancouver market, where prices have been |
| the homes. According to Sherry Chris, vice-president | | | | appreciating by 22 per cent a year, there may be |
| of Royal LePage Realty, "Everyone is enjoying the | | | | trouble looming for investors as the real estate |
| brisk market right now -- probably the purchasers | | | | bubble bursts, as such exorbitant price gains will not |
| less so than anyone else because they're becoming | | | | continue indefinitely. An average Vancouver house |
| frustrated with the lack of inventory and the bidding | | | | now costs almost half a million dollars, the highest in |
| wars." Buyers are finding a dwindling selection of | | | | Canada, and new home buyers are unable to get a |
| homes, and must bid competitively to win them. | | | | toehold in the market. Only those with houses to sell |
| Many buyers blame a current marketing strategy | | | | can afford to buy new homes in this market. |
| used by real estate agents for driving up the prices | | | | The extreme price increases characteristic of a |
| of properties. Agents list their houses at low prices | | | | speculative bubble never developed in the Toronto |
| to attract attention, then collect offers for several | | | | market and moderate though steady gains are |
| days, inspiring a bidding frenzy. Many offers often are | | | | expected. The likelihood of a sizeable price reversal is |
| made until one buyer, who often bid more than | | | | felt by most market analysts to be relatively low. |
| initially planned, wins the sale, leaving the seller happy | | | | Prospects for economic growth and employment in |
| but competing bidders frustrated. However, real | | | | Canada as a whole are good, foreign investment in |
| estate agents say it's their duty to obtain the best | | | | Canada is on the rise, and the strong Canadian dollar |
| possible price for their client's property, and it is | | | | and global competition keep inflation down. In the |
| mainly a case of supply and demand. | | | | past, a decline in housing prices has usually been |
| Some analysts say buyers are experiencing conditions | | | | preceded by a pronounced rise in short-term interest |
| similar to those of 1989, another year when multiple | | | | rates or a marked deterioration in labor markets. |
| offers and low inventory led to a real estate frenzy | | | | |