Home Prices Reach Record High in May for this Year
Recent figures on Toronto housing market indicate that there is a rapid acceleration in home prices across the city despite efforts of the government to control market prices. This rapid increase has given rise to the need for more homes in the market.
Similarly, home prices in the Vancouver region are also recovering from its previous decline at a significant rate.
Home prices in May increased by 2.2% according to data from the Teranet- National Bank Composite House Price Index which takes into consideration the trend on how home resales are made on single-family homes.
All housing markets that are covered by the index experienced an increase in home prices but Toronto and Hamilton recorded the highest increase of 3.6% and 3.1% respectively.
Although in earlier months it was predicted that home prices in Toronto will decline in May, this is however far from the reality in the city as reports indicates a price increase in the home resale market.
Toronto and Hamilton which saw home prices increase by 28.7% and 23.5%, were up in comparison to the previous year. The increase experienced this year in Toronto made it possible for the city to maintain its fourth position in the global ranking of priciest markets.
With a growing concern over the rate at which home prices were accelerating, the Ontario government in April introduced more measures to address the housing situation and a 15% tax on foreign investors was also part of the measures.
Vancouver home prices reached a new peak in May as home prices rose by 1.5%, however, there was a moderate increase in sales growth by 8.2%.
The British Columbia government prior to Ontario’s recent measures had introduced a restriction on foreign investors in July which resulted to a significant decline in prices in the months following the implementation of the tax.
But recent reports for Vancouver shows that the tax was short lived as home prices are picking up momentum once again.
Last week, The Bank of Canada gave a fair notice of the fact that the housing market stands at a risk as a result of high household debt ratios coupled with a skewed housing market.