The Royal LePage House Price Survey and Market Survey Fore is forecasting house prices to rise 9.6 per cent in the Toronto market this year in comparison to 2014. Price increases are expected in all categories.
The survey showed significant second quarter growth in Toronto, with average prices for detached bungalows hitting $712,622 and standard two-storey homes reaching $834,728. The cost to buy an average standard condominium has reached $402,901.
Royal LePage senior vice-president Gino Romanese says more and more people are looking to beat the traffic by living in the city's core.
"A global trend is that citizens want to live in and around the downtown core, and Toronto is no different," he said. "Demand for these properties far outstrips the supply, which is why we have seen such robust price appreciation over the past few years."
Toronto has also been impacted by a lack of options due to low supply for new homebuyers.
"Inventory is very tight right now and this is unlikely to abate in the short-term, as many homebuyers will delay until the Pan Am Games conclude and city traffic and congestion return to normal levels," Romanese added.
"A lot of new condos came on the market late last year expanding supply, but the rate of new builds has definitely slowed," he said.
Royal LePage says another interest rate cut implemented by the Bank of Canada could stimulate Toronto's housing market even further.
"Looking to Canada as a whole, 2015 is shaping up to be a record year for housing, despite the cloud of economic uncertainty caused by low oil prices and twitchy global economies," said Royal LePage president and chief executive officer Phil Soper.
During the past several months, the Bank of Canada has warned that Canada's current housing market may be up to 30 per cent overvalued, bringing uncertainty and risk to the economy.