Although Ontario is plunging deeper into the third wave of the COVID-19 pandemic, the arrival and modest implementation of the vaccination program and faith that a strong economic recovery is imminent once again lifted the Toronto real estate market to even greater heights last month, as indicated by the latest statistics issued by the Toronto and Region Real Estate Board (TRREB).
It is largely increases across the board, but the condo prices remain flat in the city of Toronto. Yes, some of those in the real estate industry, including during our recent Real Estate Roundtable virtual event, continue to suggest the condo rebound is already underway. Sales are definitely up by a large margin when compared to last March like all other segments but the latest data from TRREB also shows that during the same period, the average price of a condo/apartment in the 416 dropped by almost one per cent from the same time period last year.
Perhaps the prospect of losing money over the short term while rents continue to trend downward has dissuaded some real estate investors. But, others are sensing a buying opportunity when looking over the longer term to when normalcy returns in the economy and the market.
CIBC’s Benjamin Tal discusses the recent uptick in Toronto’s condo market. He says about 40 per cent of condo investors are in negative cash flow, but are buying units with a long term vision for the city. https://t.co/eUx2UvLr2t
— Mike Husband, CIBC (@mhusbandcibcma) April 2, 2021
That is the only blip in the real estate statistics that show the market continues to outpace expectations. Overall, sales for the first 14 days of March 2021 are up 41 per cent when compared to the first two weeks of March 2020, pre-pandemic.
“Confidence in economic recovery coupled with low borrowing costs supported a record pace of home sales last month. While the robust market activity is indicative of widespread consumer optimism, it is also shedding light on the sustained lack of inventory in the GTA housing market, with implications for affordability,” said TRREB president Lisa Patel.
Across the real estate market, prices are also up, especially in the regions outside the city of Toronto, as has been the trend over the past year. The largest increase was in detached homes sold in the 905, a segment of the market that saw a more than 30 per cent average price increase from 2020. The largest gains were made in the areas that are furthest from Toronto — South Simcoe County, Orangeville and Durham Region.
In the city, single-family detached and single-family attached both showed strong average price growth at 17.84 per cent and 15.74 per cent while again, the condo segment was stagnant.
Bidding wars are common all over town at the moment, and are extending into condo territory in prime locations such as in midtown Toronto away from the core.
Home prices in Toronto are up +20% in the past year. Concerns for a real estate bubble is rising as home prices are projected to reach a new high. Economists are urging for action on the matter to avoid a crash. #SJSU_POLS155 https://t.co/VPhdMXCbCb
— Julius Pascua (@julius_jpeg) April 6, 2021
There was a sizeable increase in new listings, which is an important piece of the puzzle to ensure the market doesn’t get into bubble territory. But, TRREB explained that sales growth continued to outpace the growth in listings.
“With sales growth outstripping listings growth by a large margin, including in the condo market segment, competition between buyers in some market segments and the potential for double-digit price growth could continue without a meaningful increase in the supply of homes available for sale,” said Jason Mercer, the chief market analyst at TRREB. “This will become more apparent as population growth resumes over the next year.”