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Average house price in Toronto continues to rise, to $1.28M in May

Last Updated Jun 3, 2016 at 12:55 pm EST

A 'sold over asking' sign sits in front of a detached house in Toronto on Feb. 7, 2016. THE CANADIAN PRESS IMAGES/Rachel Verbin

TORONTO – The Toronto area’s real estate market set a record last month, with nearly 13,000 homes sold, despite sky-high prices and new federal mortgage rules targeted at Canada’s most expensive housing markets.

The Toronto Real Estate Board said Friday the number of sales last month was up 10.6 per cent from May 2015 and prices were up about 15 per cent. That came one day after its counterpart in Vancouver also reported record-breaking sales for the month.

For a detached house in the city of Toronto, the average price last month was $1.28 million, while the average price for all homes was $782,051, TREB said.

TREB president Mark McLean said a shortage of homes for sale helped drive the rise in prices.

Finance Minister Bill Morneau has increased the minimum down payment for homes over $500,000, a measure aimed specifically at Toronto and Vancouver.

As of February, homebuyers were required to put down 10 per cent on the portion of a home over $500,000. Buyers can still put down five per cent on the first $500,000 of a home purchase.

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Ottawa has increasingly come under pressure recently from various quarters, including bankers and the OECD, to do more to cool down the soaring housing markets of Toronto and Vancouver. The federal government has said it is monitoring the situation and may respond with further action, if needed.

On Thursday, the Real Estate Board of Greater Vancouver reported that it its benchmark price for detached properties rose above $1.5 million – up nearly 37 per cent from May 2015.

The Canadian Real Estate Association’s national monthly report will be released on June 15, and will likely show big discrepancies between Toronto and Vancouver on one hand and other cities in the country on the other.

CREA previously reported that sales volumes in Vancouver and Toronto were stable in the first two full months since the new federal mortgage rules went into effect in mid-February. But prices continued to climb month-over-month in March and April.

TREB said 12,870 homes of all types were sold in the Greater Toronto Area through its Multiple Listing Service in May. That included 4,638 in the city itself and 8,232 in surrounding areas.

In April, TREB’s members sold 12,085 properties including 4,248 in the core and 7,837 in other parts of the GTA.

The Toronto-area sales volume is typically more than double Vancouver’s, which was 4,769 last month.