The Toronto Real Estate Market remains strong, breaking records in September but will it last?
Thursday Oct 15th, 2020
So, you think the Toronto housing market is slowing down? The Toronto-area real estate market just reported its biggest September ever, that’s right, ever. You are probably thinking really.. in the middle of a global pandemic, people on government assisted programs, financial uncertainty and these crazy COVID times, how?
Welcome to Let’s Talk Real Estate. Real estate for most is our largest asset and greatest liability. The market has always been a trending topic of discussion but over the last few months many of my clients, friends and family have reached out to me with questions and concerns. As a homeowner or someone looking to get into the Toronto real estate market, I hope you find this blog a useful resource for you, as I share my experience and learnings with clients on their real estate journey.
Back to these crazy COVID times. According to the Toronto Real Estate Board, September 2020 sales were up 42.3%. The average price of a home is $960,772, up 14% from the same time last year. This is also the third year in a row that the Toronto real estate market has been flagged as overpriced, so , what is fuelling this increase in sales and pricing?
The COVID effect. The pandemic has prompted many Canadians to reassess their living situations. With Toronto on lock-down restrictions since last spring, and as Covid cases continue to rise, we could be working from home for the foreseeable future. People are starting to look at their surroundings and it’s prompted them to buy bigger homes with more square footage (office space). Location is also a key motivator, with many people working remotely, it’s no longer a necessity to be close to downtown Toronto or the office. People are selling their downtown condos and buying homes in the suburbs. Many are fleeing to smaller cities like Collingwood, Hamilton and the 905 (Kleinburg, Nobelton, King City, Schomberg). These communities can offer more bang for your buck, more square footage and amenities.
Money is Cheap. Low Interest Rates. The bank of Canada issued three rate cuts in March, pushing mortgage rates to an all time low. This move has motivated first time buyers to join the market. There is fierce competition in that group for the $1M - $1.5M price range and my clients are facing multiple offers. Low interest rates also creates opportunity – a chance for people who already have a mortgage to “upgrade” to a bigger home. There is no prediction for rates to increase anytime soon which makes for a healthy buying market.
Inventory. There is a limited supply of houses for sale , especially in the single family detached home category. Those that invested in real estate early are unlikely to let go of their properties to downsize, relocate or move into retirement homes earlier than absolutely necessary. They are less likely to sell, rather opting to enjoy their spacious homes and gardens versus a small condo.
So for now , the market is expected to remain strong for the balance of 2020. Whether this increasing trend in real estate sales and prices continues will depend on future waves of Covid 19, how quickly the economy can recover and what government action will be taken, such as interest rates. These are uncertain times for many but it's safe to say that this pandemic is certainly changing the way people live.
Feel free to contact me if you have any questions, I am happy to talk real estate with you!
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