Average GTA House Back Under $1M

The average price of a detached home in Toronto and its suburbs fell to just below $1M in the first two weeks of August, according to data from the city's real estate board. The average price has fallen 19%, or about $230,000, since the peak reached this March.

In the City of Toronto itself, single-family homes still average above the million-dollar mark, clocking in at $1.2M in the first three weeks of August, down from a peak of $1.6M in March.

But if you're a prospective homeowner waiting for affordability to return to Canada's largest metro area, you could be disappointed, experts say. Mortgage delinquencies are near record lows, job growth has been very strong over the past year and the economy is humming along.

Ordinarily, house prices come down when buyers find it more difficult to afford their homes. But in Toronto, the sudden spike in new supply this spring has more to do with speculators leaving the market, the TD economists asserted. This is related to the new housing rules in April, designed to cool the market by the Ontario government, including a 15% foreign buyers' tax. Legislation was also brought in to expand rent controls.

As a result of all this, "prices are likely to only reset back to levels that existed prior to a year of exorbitant gains. ... We expect a reset in home prices that would return the average price back to mid-to-late 2016 levels."