The Toronto real estate market is not getting any better, but it is getting a lot worse.
The Toronto Real Estate Board (TREB) said Monday it expects prices to rise 2.5 per cent in the next six months, its first jump since November.
That would be the biggest jump in seven months.
The number of homes for sale on the market has more than tripled since the start of the year.
The number of listings on the TREB’s website rose to 1,621 on Tuesday, a six-fold increase since January, and the monthly average has more people on it than the monthly median since January 2015.
TREBs chief executive officer John Schmitt said the number of new listings in Toronto has increased by 40 per cent, from 1,073 in January to 2,853 in January.
“It’s not surprising, given the pace of the market and the amount of activity,” Schmitt told reporters.
“The market is going to be even more challenging this year than it has been in the past.”
“I don’t see any reason why we won’t see another major correction in the months ahead,” he said.
Toronto-Dominion Bank chief economist Jason Mercer said it was a sign the realtor market is showing signs of resilience.
“I think the last time it happened was when the realty market had a very weak beginning,” Mercer said in an interview.
“I think there’s a bit of a lull right now.”
It’s been a tough year for the Toronto realty industry.
A strong economy, rising house prices and a strong foreign-exchange rate all helped push prices higher in recent years.
But with the economy picking up again in 2016 and a sharp drop in interest rates, prices have tumbled again.
Mercer said the Toronto market was in a “very tough position” with a strong unemployment rate and an increased need for housing.
And while the economy has improved and housing is becoming more affordable, it is still “a little too expensive” to buy a home, he said, adding that the rate of growth for new homes is slowing.
In its statement, TREB said it expects home prices in Toronto to grow between 5.2 per cent and 7.8 per cent this year, with the median price in the city rising by $4,500 to $1.8 million.
Its next forecast for the city is 6.1 per cent growth for 2018, with prices up 5.6 per cent to $2.6 million.
The average price in Toronto last year was $1 million.
“We’re not sure that there’s anything particularly remarkable about the current trajectory,” Schmit said, noting the pace at which the city’s population has grown.
“This is just another example of a very, very strong housing market.”
With files from the Canadian Press and Reuters