The Toronto real estate market has taken an upward route since 1995. The drastic increase in the home prices at the GTA happened in 2016 with a 22.3% increase, which is higher than what the professionals predicted. The Toronto Real Estate Board states that the average selling price of a home in the province stands at $770,745 and they expect the value to increase in 2017. However, the number of real estate sales has also remained constant with around 5,800 of homes sold in January 2017.

Reasons for the Rising Home Prices

The millennial have started growing families, but the high housing prices have resulted in their adoption of the condo lifestyle. The increased demand for the homes has also led to the increase in house prices. The real estate agents have a hard time trying to explain to clients that now is the best time to buy a home or invest in the real estate industry due to the already high prices. Other things that have huge effects on the housing industry include:

• Interest Rates- stringent rules on mortgages may have caused an increase in the price of houses in Toronto. Most people have put purchasing on hold or opted to go for other regions that have lower housing prices. You may consider talking to a realtor to get more information on mortgage rules.

• Supply and Demand- the resale of houses is slightly lower, and the scarcity of houses has led to soaring prices and increased bidding wars in the real estate industry. The listed low-rise homes and condos stood at 2,300 in October 2016, which is lower than the 4,000 registered in January the same year. Toronto residents have resulted to downsizing and upsizing their houses rather than putting them up for sale.

• Trump effect– the sudden grown of the America economy will also contribute to increased housing prices. The growth of the economy exerts pressure on the US interests rates that have an effect on Toronto’s interests too.

Other things that may have contributed to the increase in housing prices include heavy taxes on home sales, increased number of millennial families, low to moderate employment, limited new homes construction, and an increase of immigrant investors by 4.9%.

Real Estate Agents

With the small housing market in Toronto, the real estate agents and realtors have resulted in finding other creative plans to attract clients. Some of them have ended up in joint ventures between the homeowners and the developers where they contribute in rebuilding the houses and then share the profits. Other ways include paying the moving and staging costs.