The Toronto Regional Real Estate Board (TRREB) is predicting record sales and prices for Toronto’s real estate market in 2021, continuing the strong demand seen last year.
The report by TRREB indicates that sales will go above 100,000 in 2021 and the average selling price will reach more than $1 million — both record-breaking figures.
TRREB claims that sales growth will be supported by “continued economic recovery” and “near-record low” borrowing costs.
So far in January, home sales have been up more than 50 per cent compared to last year, at 6,928, while the average selling price went up 15.5 per cent, to $967,885.
“The pandemic certainly resulted in an unprecedented year for real estate in 2020, but it hasn’t put a damper on the overall demand,” said Jason Mercer, chief market analyst at TRREB. “Looking ahead, a strengthening economy and renewed GTA population growth following widespread vaccinations will support the continued demand for both ownership and rental housing.”
However, Mercer warns that real estate supply will be an issue in the coming year, a point Toronto broker Andre Kutyan agrees on.
“There’s been a high demand for detached homes across the board, but the inventory just hasn’t been there,” Kutyan said. “When demand outpaces available product, it pushes prices up.”
These factors have made it an especially difficult climate for first-time homebuyers, Kutyan explained.
He described “fierce and fast” bidding wars, with buyers going house-to-house in the same day to get as many offers as possible.
“The buyers are out in droves and fighting tooth and nail to get what they can,” he said.
Also adding to the inventory crunch is an unwillingness of some to put their properties on the real estate market in the middle of the COVID-19 pandemic, according to Kutyan.
Condos are now a less appealing downsizing option for baby boomers due to often being in dense areas, and many owners are now hosting their children as well as they wait out the harsh economic climate.
All of these factors have led to some first-time homebuyers looking further and further outside the city, such as in Bowmanville, where Kutyan said he has seen unprecedented real estate activity.
Going forward into the year, Kutyan said he doesn’t see “the floodgates opening” in terms of inventory since pandemic conditions will likely continue until most of the province’s population is vaccinated, which may take a long time. As for condos, they present a much more friendly option for buyers.
“We have seen a bottoming out in terms of pricing [for condos],” he said. “It’s a good opportunity to hop in the market.”