House sales climbed 21 per cent in Toronto and 52 per cent in Vancouver in August compared to the same month last year, as buyers' fears over the tightening of mortgage rules continued to ease and they re-entered the market.
The average price of a home in Toronto was $503,094 — an increase of nearly 5.5 per cent compared to August 2012. The benchmark price for all residential properties in Greater Vancouver was $601,500, a drop of 1.3 per cent.
Toronto Real Estate Board president Dianne Usher said sales were strong for all types of homes in the city.
"Many households have accounted for the added costs brought on by stricter mortgage lending guidelines and have reactivated their search for a home," Usher said in a press release.
The board predicts that house prices will keep rising in the Greater Toronto Area (GTA), and sales will continue despite rising mortgage costs and high household debt levels.
"Despite an increase in borrowing costs during the spring and summer, an average priced home in the GTA has remained affordable for a household earning an average income," said Usher.
Vancouver prices stable
Sandra Wyant, president of the Real Estate Board of Greater Vancouver, said the B.C. city's housing market is much stronger than last year and demand has been high throughout the summer.
Sales in August rose 52.5 per cent over last year, but were not quite as strong as in July, falling almost 15 per cent from that month.
There were 8.8 per cent fewer properties listed on MLS for Greater Vancouver than there were last August.
But Wyant said househunters should not let the strong demand scare them away from buying.
"People entering the market should not confuse stronger sales activity with rising prices," she said. "Home prices have been quite stable and consistent for much of this year."
Detached properties in Vancouver saw the biggest sales jump in August, increasing 69 per cent over last year and averaging $923,700.
The number of apartments rose slightly more than 40 per cent and sold for an average of $366,100.
416 area code still pricier than 905
In the GTA, sales of detached homes increased 24 per cent and sold for an average of $635,531 ($783,708 in the 416 area code and $590,583 in the 905 zone of the GTA).
Condominium sales rose 20 per cent, with units selling for an average of $339,512 ($357,572 in the 416 area code and $293,825 in the 905 region).
The strong increase in sales this summer is in part a recalibration of the market after a slowdown in activity last year caused by stricter mortgage rules.
Other cities around the country also showed increases. Calgary residential property sales were up 27.5 per cent in August over last August. Ottawa saw a 6.5 per cent uptick in residential sales while sales of single family homes in Greater Victoria were up 28.3 per cent in August.