Iain Marlow

 

The GTA's real estate market continues to heat up as the economic recovery gives potential homebuyers the confidence to push ahead.

However, talk of a housing "bubble" is premature, an analyst said, even as the federal government begins to express concern over the state of intense purchasing.

November's new home and condo sales in the GTA are up 156 per cent from last year, according to data released Monday by the Building Industry & Land Development Association. Although figures are obviously influenced by last year's slump, the surge in real estate purchases stretches back beyond the recession of 2008 to eclipse the three previous years to 2005.

"You've got a bunch of things happening at the same time and causality is always hard to pinpoint," Stephen Dupuis, BILD's president and CEO, said in an interview. "For sure, very low interest rates cannot hurt ... But it's not just low interest rates, because people don't go out and make big investment decisions like that just because."

Part of the surge in new home and condo sales, BILD said, is from builders cutting construction supply prices sharply as the economic situation worsened. Another aspect of the increase comes from home and condo resales, where a lack of listings has led to a seller's market – with frequent bidding wars upping the price of even the most basic condo.

In early December, the Toronto Real Estate Board released figures showing resales in November 2009 were double those of November 2008.


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