The average price of a home in Toronto is set to rise by more than $400,000 in the next two years, according to a new report from real estate agent Zillow.
The report predicts a rise in home values of about 20 per cent, with new construction loans costing the city an estimated $1.6 billion over the next 10 years.
While the report did not give specific numbers, it did note that Toronto’s average house price has climbed by more that 5 per cent annually over the past decade.
Toronto, which has been struggling with a housing shortage since it opened its borders in 2006, has seen a sharp increase in the number of home sales in the past year.
The average sale price of the average Toronto home rose 8.7 per cent to $1,988,813 in January, up from $1 the previous month.
That’s up from 5.9 per cent in January 2016.
But that’s not necessarily a sign of success.
According to the report, the number and number of homes sold is driven by the demand for homes, which is the main driver of the price growth.
“We see that the increase in home sales is driven largely by the increase of buyers, and also the fact that we’re seeing a lot of new buyers in the market, and the number continues to grow,” said Zillows senior economist Stephen Stelzer.
“So there’s been a real influx of buyers into the market.”
Home buyers are also starting to head to the city in droves, with nearly 1.7 million people moving to Toronto in 2016, up 10 per cent from 2015.
Stelzer noted that the city’s population has been increasing for years, and that has meant more people are moving into the city to live and work.
“This is a relatively small number of people that is taking a major role in the population growth,” he said.
The number of Toronto homes sold also increased slightly in the second quarter of this year, from 2.3 million to 2.4 million.
That’s compared to the same quarter a year ago, which was the fastest growth rate since 2006.
Toronto’s population grew by 8.9 million people in the same period, while the number moved from 1.4 to 1.6 million.
Toronto is a real estate hot spot for the first time in the city history, with prices increasing at a rate of about 15 per cent per year.
Zillowers figures are based on the latest available data.
However, the report also showed that some areas of Toronto are seeing more and more people moving into them.
“The population density is at a historic low.
So you’re seeing more people move into those areas of the city, and a lot more people have moved into those neighbourhoods than in other parts of the GTA,” said StelZ.
In the city of Toronto, where about half of the population is under the age of 30, there were about 1.3 per cent more people living in condos in 2016 than in 2015.
That is up from the 1.1 per cent increase in 2015 and is expected to keep rising.
The average number of properties per household in the Greater Toronto Area was just over 4,000, down slightly from the peak in 2010 of 4,827 properties per house.
However that number is expected continue to decline.
That means that by 2023, the average property per household will be down to just over 1,800.