Toronto Real Estate (March 2021 Update)
Toronto is the fastest-growing city in all of North America, which makes the real estate market increase year after year because of the population growth. Immigration is a key contributor to the strength of Toronto’s real estate market.
Toronto’s real estate market continued its strong pace of growth in January 2021 with average sold prices reaching $967,885, a 15% increase from January 2020. Larger homes saw the greatest annual price increases with detached homes selling for an average of $1.35 million, a 31% increase . Semi-detached and townhouses followed close behind with average sold prices of $996,794 and $913,923 – an increase of 26% and 32% respectively. The condo market remained weak, however, with average sold prices of $600,830, a 5% decrease and following a stabilizing trend for the past few months.
Sales have remained high despite the winter season and further COVID-19 lockdowns. A total of 6,928 homes were sold in January 2021, a 51% increase vs. January 2020. Detached homes were the busiest market with 2,766 sales, a 33% increase from last year. Condo apartments were a close second with 2,471 homes sold, an 85% increase vs. Jan 2020 despite the drop in prices. Townhouses saw a remarkable drop in activity to near COVID-19 lows, but that may be due to lower inventory and higher bidding war activity as Sales to List price ratios reached 108% on average throughout TREB.
New listings recovered slightly and rose above sales this month, but housing inventory remains scarce across the GTA. With strong promises of stimulus from the Liberal government, including a revamped First-Time Home Buyer program and direct handout programs and promises of a continued low-interest environment by the Bank of Canada, there are significant tailwinds for the future of the GTA real estate market. However, surging COVID-19 cases, a slow vaccine roll-out, further lock-downs, and a depressed job market threaten to pose strong headwinds to further growth. With a 13% return, it is unclear whether Toronto’s real estate market can continue its upwards climb without any real wage growth or unconventional stimulus.
Toronto Housing Prices:
Detached house:
| # Beds | Jan 31 – Feb 28 | 3 mo ago | 6 mo ago | 1 year ago |
| 2 Bd | $1.2M +26% | $994K | $1.0M | $989K |
| 3 Bd | $1.4M +14% | $1.3M | $1.2M | $1.2M |
| 4 Bd | $2.2M +11% | $1.8M | $1.8M | $1.9M |
| 5 Bd | $2.6M +22% | $2.7M | $2.8M | $2.2M |
| 6 Bd | $2.9M +37% | $2.4M | $2.5M | $2.1M |
| All | $1.7M +14% | $1.5M | $1.5M | $1.5M |
Townhouse:
| # Beds | Jan 31 – Feb 28 | 3 mo ago | 6 mo ago | 1 year ago |
| 1 Bd | $564K -10% | $589K | $627K | $624K |
| 2 Bd | $884K +10% | $801K | $837K | $806K |
| 3 Bd | $1.1M +8% | $1.0M | $1.0M | $1.0M |
| 4 Bd | $1.4M +13% | $1.2M | $1.1M | $1.2M |
| All | $1.1M +9% | $997K | $1.0M | $1.0M |
Condo:
| # Beds | Jan 31 – Feb 28 | 3 mo ago | 6 mo ago | 1 year ago |
| Studio | $430K -7% | $387K | $455K | $465K |
| 1 Bd | $591K -6% | $554K | $580K | $627K |
| 2 Bd | $773K -6% | $733K | $764K | $826K |
| 3 Bd | $906K -2% | $795K | $802K | $926K |
| All | $677K -7% | $637K | $671K | $727K |
Based on Toronto pricing data shows a high level of demand for purchasing a home even when there is higher unempleyment and more uncertainty during the pandemic, and the reason is there is so much interest is because mortgage rates are so low.
Some market experts share Toronto housing market predictions?
"The pandemic is causing people to delay getting married or having children, which are typically incentives to buy a property or move into a larger home. When these life stages are delayed, so are home purchases. “Also, we normally get 100,000 new immigrants into the GTA every year. And whether they’re buying homes or renting, it’s a big boon to the housing market. But we know immigration is going to be down because international travel is down. You can’t move as freely as you were able to six months ago. That’s likely going to put a dent in home sales, too, over the next year or so. It will also slow down student and multifamily rentals."
Roelof van Dijk
Head Canadian analyst at CoStar, a real estate analytics company.
“I was surprised at how the housing market responded to the pandemic. In March and April, I was very pessimistic and thought the market would correct. But, surprisingly, it’s been resilient. I think Covid-19 created a lot of confusion in people’s minds. They thought it was going to cause a huge economic catastrophe and a lot of people were going to lose jobs. People did lose jobs, but mainly, those were in lower-income positions. The fallout has not really impacted the high-skill labour sectors, like finance and technology. Thus, the market has been able to starve off a potential sell-off and homeowners have been able to hold on to their real estate assets.”
VIK Singh
Assistant professor, Ted Rogers School of Management, specializing in the impact of Covid-19 on the economy.
“I would say that our biggest concern is uncertainty. We don’t know how the pandemic will end. We’re always hoping for the best, and that’s why we always give these two scenarios: the worst-case versus the best-case scenario. Best case is that we get out of this pandemic and we don’t have a repeated, prolonged lockdown and people are able to go back to work, life resumes to some sort of a new normal. Worst-case scenario? There’s no vaccine. We have a repeated resurgence of the virus. We have a next phase, where we go into prolonged lockdown, people can’t work, have to stay home, everything is shut down and really the worst case is that we don’t get out of it.”
Dana Senagama
Principal market analyst for the GTA, Canada Mortgage and Housing Corporation.
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