Home prices in the Greater Toronto Area are on the rise again — and that momentum is expected to continue into the coming year, with the median price of a two-storey home rising north of $1 million, according to a new forecast from Royal LePage.

Phil Soper, president and CEO of the brokerage, said the median price of a two-storey detached home in the GTA is predicted to rise by 4.5 per cent by the end of 2020, ending the year at $1,027,000. That marks the second time the detached price has risen that high, following a price surge in the third quarter of 2017, when two-storeys crossed the $1 million mark just for that quarter.

Soper adds that for Toronto proper, “the number went over that some time ago.”

Royal LePage’s Market Survey Forecast for 2020 predicts that low supply and a growing population is projected to fuel a bump in overall home prices across the GTA in the upcoming year, as city centre momentum continues and other regions bounce back from a recent market correction.

The aggregate price of a home in the GTA is forecast to jump 4.75 per cent year-over-year in 2020, rising to $883,700.

“Inventory is critically low and it is possible that we could see a return to accelerating high price appreciation in the near term without new supply becoming available,” said Kevin Somers, chief operating officer at Royal LePage Real Estate Services Limited.

“Areas such as Richmond Hill and Markham, which were among the hardest hit by the recent market correction, have already shown signs of a recovery, while areas closer to the city centre are showing significant momentum heading into 2020.”

The median price of a condominium is expected to increase by six per cent year-over-year to $600,000. Barring a recession, Toronto’s condo market should remain hot throughout 2020, Soper said.

New Canadians and first-time home buyers — buoyed by its huge millennial cohort now trying to secure their first property — are key drivers.

Buyers in Canada’s urban centres should brace for a challenging year as chronic housing shortages continue.

“We’ve already seen the return of bidding wars and that will simply accelerate,” Soper said.

The national picture suggests that home prices, for most regions, are expected to appreciate at single digit rates in 2020.

The aggregate price of a home in Canada is forecast to rise 3.2 per cent year-over-year to $669,800 in 2020, with the median price of a condo and two-storey detached house projected to increase 3.6 per cent and 3.1 per cent to $506,100 and $785,400, respectively.

Somers is banking on the Liberal platform promise to increase the qualifying purchase threshold in the first-time homebuyer incentive to $800,000, which he says would be a boost for young families who have outgrown their condominiums, but are unable to afford a larger property.

Somers said the first-time homebuyer incentive may benefit single first-time condominium buyers, especially in the greater region, but it is unlikely to benefit buyers looking for a property suited for a family.

The forecast also hinges on current healthy economic trends remaining steady, Soper said

“Slowdown in economic growth could cause us to revise the outlook,” he said. “While one month does not a trend make, November’s surprisingly weak employment numbers may be the trigger that causes the Bank of Canada to join the U.S. Federal Reserve in lowering interest rates.”

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He said falling interest rates typically drive up housing demand, as they tend to result in cheaper mortgages.

“This would mean further upward price pressure in regions where employment remains healthy, which is most of the country,” Soper said.

Jason Miller is a breaking news reporter based in Toronto. Reach him on email: jasonmiller@thestar.ca or follow him on Twitter: @millermotionpic