Canada's two hottest housing markets are seeing house prices escalate into record territory in October — a time when real estate sales typically slow down.
The average price of a detached house in Toronto has risen by 12.5 per cent in the last year to reach $1.07 million in October. In Metro Vancouver, the price spike was even steeper, with the benchmark price for a detached house 20.1 per cent higher than it was a year ago — now nudging $1.2 million.
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The strongest price rises were seen among low-rise and detached homes in both markets.
Vancouver home prices are seeing the greatest escalation in every segment, driven by a shortage of houses to buy. The benchmark price of an apartment property is up 11.4 per cent over the last year to $425,800 and the price of an attached unit increased 9.3 per cent over the year to $526,700.
Vancouver house price increases have been picking up speed all year.
For October, Toronto condo apartments are up a more modest 4.2 per cent in price to $406,790, while the average townhome rose 11.2 per cent in the last year to $579,350.
Low mortgage rates are luring buyers into the market, even as the price of homes becomes increasingly prohibitive, especially for first-time buyers.
October home sales in Metro Vancouver soared by 19 per cent to 3,646 and Toronto sales rose by 3.4 per cent to 8,804.
Demand outstrips supply
"Home sales are more than one-third above what's typical for this time of year, yet the supply of homes for sale is the lowest we've seen in five years," said Darcy McLeod, president of the Real Estate Board of Greater Vancouver.
Both markets are plagued by a lack of resale homes, with new listings falling eight per cent in Vancouver with detached properties in particularly short supply.
Toronto, with its abundant supply of condos, is seeing less supply pressure, but the number of active listings has dropped 7.5 per cent from last year.
The real estate frenzy could continue, if industry forecasts come true.
"Even if we do see a greater supply of low-rise listings in the marketplace over the next year, market conditions will remain tight enough to see continued price growth well-above the rate of inflation," said Jason Mercer, director of market analysis for the Toronto Real Estate Board.