The value of homes in both Malvern and Rouge increased more than almost any other area in Toronto last year, according to a report by ReMax Ontario Atlantic Canada.
The average price of a detached home in Malvern and Rouge went up 7.3 per cent in 2009 to $368,095, the second highest increase in Toronto. South Pickering saw the highest price appreciation at 9.3 per cent to $358,493, with Malvern, Rouge and Hillside tied for second place.
First-time buyers were attracted by the affordable prices of homes in the area, according to the report.
Low interest rates and easy access to the 401 and TTC made an attractive housing market, said Dolores O’Brian, a real-estate agent at ReMax Rouge River Realty.
“Many of the first-time home buyers are new immigrants to Canada,” O”Brian said. “They like to own houses that are not too old, which attracts them to this area. The homes are also aesthetically pleasing and are close to lake Ontario.”
The upper-class areas of Toronto saw lower gains, largely due to a lack of move-up buyers, the report noted. Homes in Don Mills and Rosedale appreciated by only about one per cent. Weak consumer confidence, especially during the first half of the year, caused many potential move-up buyers to stay out of the market.
The market is expected to stay strong for the first half of this year, but could slow down once Ontario’s Harmonized Sales Tax comes into effect on July 1. The tax will apply to real estate commissions, increasing the cost of buying a house. An expected interest rate hike sometime later this year could also deter potential home buyers.
“A home that costs 500,000 will costs 540,000 after the HST takes effect,” O’Brian said. “It’s really hard to tell what effect it will have. It may hit a little, but I don’t think so. I think an interest rate hike would have a strong effect.”
The ReMax report, released in late January, focused on the price appreciation of single detached homes between 2008 and 2009 in 63 districts within the Toronto Real Estate Board.