Is Toronto Real Estate In Store for a Condo Buyer’s Market?
If you’re looking to get into the Toronto condo market, this fall could be an opportune time. Toronto real estate has weathered the height of the pandemic, with sales back up and average prices in June hitting a new record high. Meanwhile, condos experienced less-pronounced price growth, hinting at a possible buyer’s market in store for the Toronto condominium sector.
According to data from the Toronto Real Estate Board (TRREB) average prices in June reached $931,000, surpassing the previous record of $920,791 back in April 2017. Detached home prices in Toronto increased by 14.3% to $1.52 million, while semi-detached home prices were up 22% to $1.29 million. Meanwhile, average price of Toronto condos rose by 5.6% in June, to $672,000. For those who have been waiting for the right time to get into Toronto’s pricey property markets, this could be it.
Christopher Alexander, Executive Vice President and Regional Director at RE/MAX of Ontario-Atlantic Canada, recently appeared on Breakfast Television where he hinted at the possibility of a market shift in this popular Toronto real estate segment.
“The Toronto condo market has largely been driven by supply and demand from immigration. The GTA was attracting about 100,000 new residents every single year. With border closures between provinces and countries, it’s been difficult for people to come into the area. Plus, the short-term rental market was severely impacted as well, so there’s a lot more inventory for buyers to choose from,” said Alexander. “We’re just teetering on a balanced market for condos right now, and it could possibly end up being a buyer’s market come the fall. If you’re looking to get into the condo market, now could be the right time, as prices are moving in the opposite direction than the detached segment.”
Detached Homes in Short Supply
Home-buying priorities have changed in the wake of COVID-19, as RE/MAX brokers report a spike in demand for larger properties, and buyers’ sights set outside of the city core and even as far as cottage country, which is currently experiencing a boom in activity. High demand and low supply have prompted an increase in prices for these types of properties.
A new RE/MAX report reveals that in the first six months of 2020, detached housing values increased in 95% of markets across the Greater Toronto Area. Here in the 416, double-digit price growth was reported in 60% of districts. Sales and listings plummeted when the State of Emergency came into effect, but by mid-May, green shoots had sprouted in regions around the city and demand was once again on the upswing.
Positive Consumer Sentiments Boost Toronto Real Estate Activity
A Leger survey conducted in May on behalf of RE/MAX revealed that Canadians have positive sentiments around buying and selling, with 56% of Canadians who are planning to engage in the real estate market saying they expect to do so in less than a year. Furthermore, 44% of Canadians said they believe the real estate market will bounce back to its pre-pandemic strength by 2021, and 29% believing that this will happen sooner, before the end of 2020.
Indeed, June saw these sentiments materialize with heated home-buying activity in Toronto falling just short of 2019 levels in terms of unit sales (-1.4%), with active listings down almost 30% from year-ago levels.
“There’s no question that lack of inventory hampered sales in June and will continue to do so, especially in the 416,” says Alexander. “Inventory issues have plagued the GTA for years now. It’s clear that there is not enough supply to satisfy demand. While this is great news for existing homeowners, new homebuyers face serious challenges getting into this pricey market. If government wants to control the rapid increase in price, more supply needs to come on stream.”
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