05/04/2016 03:52 EDT

Toronto House Prices Are Rising By $550 A Day

Owners can be forgiven for thinking they’ve won a real estate lottery.

Mark Blinch / Reuters
A house is seen for sale on the real estate market in Toronto, April 9, 2009. Canadian housing starts rose an unexpectedly strong 13.7 percent in March, breaking a six-month losing streak, but analysts said the recovery is likely to be temporary. REUTERS/Mark Blinch (CANADA BUSINESS)

Every day you own a detached house in Toronto, your net worth rises by $550.

Or put another way, every day you delay buying a house in Toronto will cost you another $550.

The Toronto Real Estate Board (TREB) reported Wednesday that single-detached home prices hit an average of $1.258 million in April, up a massive 18.9 per cent in a year.

That breaks down to price growth of $16,820 per month, or roughly $550 per day.

That’s for single detached homes in the city itself. The average price for all home types in Greater Toronto rose by $104,000 in a year, to $739,082, up about 16.3 per cent in a year.

Condo owners aren’t seeing nearly the same rate of growth, though. Condo prices in the city rose 7 per cent, to $436,545, and in the suburban 905 region they rose 7.8 per cent, to $343,439.

So if you own a condo in Toronto, you’re seeing price growth of $2,411 per month, or “just” $79.26 per day.

Detached home owners can be forgiven for thinking they’ve won a real estate lottery.

If Toronto home prices continue on the path they're on — and that's a huge "if" — it will cost between $2.26 million and $3.6 million to buy a detached house in the city by 2026.

Supply shortage as owners keep homes off market

Toronto set yet another all-time home-sales record in April, TREB said, but said sales “could have been even higher if we had benefitted from more supply.”

There were four per cent fewer detached home sales in Toronto this April than last, TREB said. Faced with a shrinking supply of family homes, Torontonians are turning to those less-lucrative condo properties, sales of which are up 17.4 per cent in a year.

TREB says Torontonians are choosing not to list their homes “because of the second substantial Land Transfer Tax and associated administration fee.”

But a recent Re/Max report suggested some different reasons for why people are taking their homes off the market: Some are waiting for even higher sale prices later on, while others are afraid of becoming homebuyers in such a competitive market.

If even the owners of million-dollar homes are afraid of this market, what chance does anyone else have?

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