UPDATE 1-Toronto home sales surge, contrasting with Vancouver

Wed Sep 7, 2016 12:05pm EDT
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* Toronto August home sales up 23.5 pct vs year ago - data

* Vancouver sales fell 26 pct over same period

* RBC CEO 'more comfortable' about Toronto than Vancouver (Adds comment from RBC chief executive officer)

By Matt Scuffham

TORONTO, Sept 7 (Reuters) - Home sales in Toronto increased by 23.5 percent in August from a year earlier, the Toronto Real Estate Board said, contrasting sharply with a decline in Vancouver where a tax on foreign buyers was introduced.

The TREB, which represents 45,000 real estate brokers in Greater Toronto, said on Wednesday a record 9,813 sales were reported in August 2016. Home sales in Vancouver fell 26 percent over the same period, the Real Estate Board of Greater Vancouver said earlier this month.

"The conditions underlying strong demand for ownership housing (in Toronto) remained in place, including a relatively strong regional economy, growth in average earnings and low borrowing costs," said Jason Mercer, TREB's director of market analysis.

Housing markets in Vancouver and Toronto have seen rapid price increases, fueled by foreign investment and a sustained period of low borrowing costs since the 2007-2009 financial crisis, stirring concern among lawmakers and regulators of potential speculative bubbles in these cities.

Speaking at the Scotiabank Financials Summit in Toronto on Wednesday, Royal Bank of Canada Chief Executive Dave McKay said the bank was more confident about the Toronto market than Vancouver.   Continued...