Looking for a home in Canada’s biggest city? Good luck with that.
Greater Toronto, a region with over 6.5 million people, has just 3,200 homes for sale, an all-time low, according to Bloomberg. That’s less than half the 7,900 on the market a year ago, the outlet said, citing the Toronto Regional Estate Board.
Blame low interest rates. Home sales surged by almost a third last year to more than 121,000, sparking fears of a bubble and breaking a record set in 2016. America’s neighbor to the north is more because mortgages make up one of its biggest sources of consumer debt. The Canadian financial system’s exposure to mortgages is twice that of its U.S. counterpart.
Average home prices in Toronto jumped 18 percent last year to about $862,000, also an all-time high.
While authorities have tried to cool the housing market by taxing foreign buyers, analysts say the fundamental cause of a national housing shortage is a mismatch between population growth and the pace of homebuilding.
“We continue to suffer from a real lack of inventory on the marketplace,” Jason Mercer, the Toronto real estate board’s chief market analyst, told BNN Bloomberg Television. “We really need to get a sense of what policy makers are going to do to get a handle on that supply issue.”
Supply is most directly controlled by municipal and provincial governments, which hold sway over rules for land use and development. Demand is mostly directly affected by measures available to the federal government, such as help for first-time buyers.
Economists last year projected that the home sales in Canada would peak in 2021 and start to fall in 2022 and beyond.