Whether or not it can keep up the pace with flagging economic indicators, the Toronto real estate market once again had a very busy month in October with more than 10,000 sales for the month, up a whopping 25 per cent from 2019.
According to the new market numbers from the Toronto Regional Real Estate Board (TRREB) new record sales were once again hit for the month of October. Alongside sales, new listings are also setting records, which raises the question of how long the ride can last given the increasing supply of homes on the market.
According to TRREB, the sales and new listings are creating a segmented market where detached homes and other areas see a pace of sales growth outstripping new listings, whereas in the condominium market new listings have doubled and sales are only up marginally at 2.2 per cent.
“Competition between buyers of single-family homes, and particularly detached houses, remained strong last month and continued to support double-digit annual rates of price growth in many GTA neighbourhoods,” said Lisa Patel, TRREB’s president. “In contrast, condo buyers have benefitted from much more choice compared to last year. Pre-COVID polling had already pointed to an increase in investor selling in 2020. The pandemic only added to this trend with a stall in economic growth and a halt to tourism impacting cash flows for many investors.”
Does the real estate market segmentation hold true regarding price growth?
Overall, prices based on the MLS® HPI Composite Benchmark are up by 10.8 per cent when compared to October 2019. The average selling price for all home types combined was $968,318 – up by 13.7 per cent.
But, the vast majority of price growth is outside the city of Toronto and throughout the GTA perhaps indicating that more people are looking to make a move outside the city and those markets are heating up and fuelling the record-breaking numbers.
For example, real estate prices in the city of Toronto’s detached home sector grew over 11 per cent while prices of detached homes in the GTA grew a whopping 18 per cent. The difference is even starker in the semi-detached end of the market with 15.4 per cent price growth in the GTA and just over 4 per cent in the city.
Within the city of Toronto, condo sales actually dropped 8.5 per cent with the slimmest of price growth at under one percent, which has prompted some experts to suggest now is a historic opportunity to buy a downtown condo with plenty of options and less pressure.
Statistically, the hottest regions in terms of price growth are the furthest away from Toronto in Durham Region, South Simcoe County and Orangeville, which are all experiencing price growth well above 15 per cent in all sectors, aside from a 12 per cent marker for Durham condos. The regions are also not subject to the same COVID-19 restrictions as other areas of the GTA including Toronto as well as the regions of York and Peel.
Still, TRREB expressed optimism in the overall real estate market.
“Looking beyond COVID-19, it is clear that the high demand for housing will continue. The federal government has set immigration targets above 400,000 people for each of the next three years. The GTA will undoubtedly continue to benefit from this population growth. All of these people will need a place to live, whether in the ownership or rental markets,” said John DiMichele, TRREB’s CEO.