Toronto home prices surged 23.8 percent in February from a year earlier due in part to fewer listings, according to a report that is likely to add to concerns that a bubble is developing in the Canadian city's housing market. The Toronto Real Estate Board said on Friday that prices accelerated across dwelling types, but particularly for single-family detached homes, which racked up a 26.3 percent increase. Sales of existing homes in the Toronto area rose 5.7 percent to 8,014 units. Sales of condominiums jumped 15.9 percent, while detached homes climbed 3.0 percent. Despite the strong demand, total new listings tumbled 12.5 percent to 9,834.
Jason Mercer, the real estate board's director of market analysis, said the supply crunch in the city was contributing to the double-digit price increases. "Until we see a marked increase in the number of homes available for sale, expect very strong annual rates of price growth to continue," Mercer said. Although the federal government has taken a number of steps in recent years to try to cool the country's robust housing market, prices in Toronto have continued to soar, and some economists now say a bubble is forming.
Finance Minister Bill Morneau has repeatedly said the government is keeping an eye on the market, and a recent Reuters poll showed rising prices are likely to pressure policymakers to take further action. The lofty Vancouver market, on the other hand, appears to have come off the boil. Separate data on Thursday showed home sales there surged in February from January but were sharply lower than a year earlier.
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