GTA housing prices nudge over $500,000

The average GTA house price now hovers at over half a million dollars, up 10.5 per cent from March of last year.

Low interest rates and a shortage of homes for sale continue to propel prices skyward and fuel bidding wars that have now become virtually de rigueur in many Toronto neighbourhoods.

That combination of factors helped push prices to an average $504,117 across the GTA and to almost $550,000 in the Toronto 416 regions in March, up from $456,234 and $498,050 respectively a year ago, according to the Toronto Real Estate Board (TREB) analysis of almost 10,000 sales across the region in March.

Prices in the 905 areas averaged $477,006, up from $428,155 last March.

The price escalations are showing no signs of a letup, given that the spring housebuying spree has started early this year — thanks in large part to the unusually warm weather — and has yet to hit its peak.

Even veteran realtors are shaking their heads as GTA home prices continue a climb that has been unstoppable over more than a decade, even through the recent recession and massive global economic uncertainty.

Inventory remains a problem and has realtors concerned why so few new listings are coming on the market.

“The huge shortage of listings, especially under $700,000, has made this early spring market crazy,” says Toronto realtor Desmond Brown.

“And with the threat of interest rates going up, people are in a bit of a panic to buy and close before their 120-day low mortgage rate commitments expire.”

New listings actually increased in March over a year ago, but aren’t keeping up with demand, says Jason Mercer, senior manager of market analysis for the Toronto Real Estate Board.

“If competition between buyers remains as strong as it is right now, we will almost certainly see an average selling price above $500,000 for 2012 as a whole.”