Any lingering concerns that the mortgage stress test and new taxes put the Toronto housing market into a deep sleep can now be laid to rest, says the Toronto Regional Real Estate Board (TRREB).

Instead, the board is predicting a double-digit climb in sales and prices this year that will boost the average cost of a resale home up nearly 10 per cent to $900,000 compared to last year’s average of $819,319.

Last year saw a 12 per cent growth in the average home price compared to 2018 and the board is warning that in the year ahead, buyers are going to face increased competition for a flat or declining number of listings.

“It’s an issue because 10 per cent price growth year over year isn’t sustainable,” said Jason Mercer, the real estate board’s chief market analyst.

“It’s also clear that niggling around the edges with policies like we’ve seen in 2017 and 2018 is only a temporary fix. We have a regional economy that continues to attract people from all over the world and they need a place to live.

“So the demand over the long term for ownership housing is going to remain strong,” Mercer told a banquet hall of real estate industry professionals at the board’s annual economic summit where it releases its Market Year in Review and 2020 Outlook report. “We need to start moving toward policies that are bringing more supply online.”

Mercer told the crowd that “last year’s (average) price of $820,000 is almost back to the peak that we hit in 2016 and 2017. Certainly as we move forward we’ll be setting new records as we move into 2020.”

The sales growth reflects a trend to less expensive home types — condos and lowrise formats such as semi-detached and townhouses. But if the action accelerates in the detached housing segment, which showed a marked recovery last year, this year’s price average will be even closer to the $1 million mark, said the board.

Home sales, which continued to show year-over-year gains through the traditionally slower months of December and January, are expected to continue climbing by 10.5 per cent this year to 90,000 — again driven by condos and attached houses.

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TRREB’s report says that the strong sales should, in theory, have prompted more people to list their homes and cash out their equity.

But with the exception of a brief spike in 2017, listings have been persistently flat or down. New listings fell 2.4 per cent year over year in 2019.

The board blames a number of policies, including the introduction of a municipal land transfer tax in Toronto that means many homeowners have chosen to renovate rather than buy up, and the lack of less expensive “missing middle” lowrise homes that give condo owners a move-up choice.

Selling prices rose by 10.5 per cent year over year in January across the region to an average of $747,175 — including all condos and house types.

In the City of Toronto, where real estate agents are reporting increasingly competitive conditions, prices rose 12.3 per cent year over year.

Detached house sales grew 23.3 per cent in the GTA in January and prices climbed 10.5 per cent year over year. Condo prices rose 15.1 per cent to an average of $630,047 last month.

While sales of all housing types — condos, towns, semis and detached — climbed 15.4 per cent year over year in January, the number of new listings declined 17.1 per cent and the number of active listings dropped 35 per cent.

Ipsos research showed that the number of owners who expect to list their homes for sale this year was about 14 per cent — about the same as the last three years.

“But flat intentions is still growth because of population growth. If we’re expecting 30,000 or 40,000 new households, even if the existing base is flat, the trajectory on demand should still be up,” said Sean Simpson, Ipsos vice-president.

Tenants can expect to see above-inflation rent increases for one- and two-bedroom condos. The rent for a one-bedroom condo last year was $2,201, up 5.4 per cent from 2018, when rents increased 9.9 per cent year over year. A two-bedrooom condo rented for $2,874 on average, a 4.5 per cent yearly growth rate that was also lower than the 7.9 per cent increase between 2017 and 2018.

That’s likely due to the increase in the number of available units, which increased by more than 20 per cent at some points last year.

A snapshot of Toronto area home buyers and sellers

86 per cent of home buyers had a down payment of 20 per cent or more, including 27 per cent who had no mortgage at all.

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87 per cent of home buyers were confident they could afford their payments if mortgage rates rose 2 points.

While 42 per cent of home buyers were first-time purchasers last year — up from 38 per cent in 2018 — that still represents a marked decline from 2016 when 53 per cent of home consumers were first-time purchasers.

Only 42 per cent of buyers said they were likely to purchase a detached home last year. That is down from 54 per cent in 2015.

These findings are from the Ipsos Home Owners survey in November, which looked at the buying and selling intentions of 2,500 GTA homeowners who purchased in the 12 months leading up to the survey. It is considered accurate within 2 per cent.