A few weeks ago we read a very interesting article that stated how smaller nuclear families are coming to terms with the fact that living in a popular major metro area in Canada is going to mean not living in a detached home, unless they experience major income increases or have some sort of windfall of good fortune like a lottery win. The high prices for real estate in popular regions like Vancouver and Toronto is something one just has to accept if you’re going to choose to live there.

But this article talked about how people are adapting to that challenge, and even finding ways to make it work with children living in the home too. Some of these people will be able to move into a more spacious home in the future, but many will be living in a condominium or something similar for the entirety of time they live in these cities. And that’s alright!

We’ve seen how the real estate markets in any city in Canada has been able to weather the economic storm of the last near year, and that’s good news for anyone who’s livelihood is related to the business. It remains as competitive a business as ever, though, and that’s why our online real estate lead generation system here at Real Estate Leads is so highly recommended for realtors who are looking for something of a leg up on their competition in the business.

And as you might expect, there’s always a whole lot more of it if you’re in real estate in a major metro area that’s also categorized as a ‘desirable city’.

But enough about that. We’re in the business of good news when it comes to real estate in Canada, and the following definitely qualifies as good news.

Up 90%

Condo sales in the GTA (Greater Toronto Area) surged 90% year-over-year on the MLS for the first 2 weeks of January. Further, condo listings are up 66% over last year, and there is strong demand for condos in the downtown area of Toronto. All of this builds on the fact that for the second half of 2020 the condo market was fairly sluggish. That was evidenced in prices in the downtown core dipping about 10%. Some investors saw this as an opportunity, but the overall tone was one of trepidation and concerns about prices declining too much and threatening the health of the local real estate market.

All of this was then countered by real changes that actually began early last month, in December of 2021. Condo sales for that month increased by 75.9% year-over-year for the City of Toronto. There may well be all sorts of reasons for why buyers returned to buying condos in Toronto, but all of that likely doesn’t mean much here or to anyone who might be a prospective home buyer (and client as it were).

The fact of the matter is condos are selling well in metro Toronto right now, and that’s good news for realtors in the city and the condo owners who are pleased to see an appreciation of value that’s occurred for their small home in the sky.

Low Rates Meeting Soft Prices

So here we are now with the downtown Toronto condo submarket picking up from where December left off, with many buyers taking advantage of low interest rates and soft condo prices to become new homeowners. What’s also interesting is that market research surveys are indicating that the majority of these buyers are not investors, and rather are buying the condo as a primary residence for themselves.

The investor side of the coin still has to be a part of this; to that end it’s worthwhile to note that with a forecasted 1.2 million newcomers to Canada in the next three years and some 60% of them being economic class, there IS going to be a large demographic that will be looking to rent places to live that are near their workplaces in Canada’s major metro centres.

As if often the case, Q1-2021 may determine what happens for the rest of the year, and if that’s true then it’s going to be a year where many realtors in Toronto and Vancouver are going to have clients that are looking to buy a condo in the city, or sell one.

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The fact that the Real Estate Market in Canada has proven itself to be very resilient is something we’ve carried into 2021 from last year, and one of the things that’s unfortunately true on the other end of things is that the economic woes of the pandemic are far from over. The continued vitality of the market has been a mix of many factor, but fundamentals are a huge part of it. In particular there’s just not enough housing in many parts of the country, but ever-increasing demand for it. This certainly applies to any major metro area of the country.

The fact here is that the number of new listings on the Canadian MLS (Multiple Listings Service) could be quite paltry this spring, and what is very possible is seeing record demand clashing with record-low supply. You don’t need to be an economics major to know which direction prices go in any such scenario, and given the current ongoing pandemic situation and all sorts of other concerns this really looks like it will be furthering Canada’s housing crisis.

Of course that is something the Federal Government is to address if they’re to earn the enviable salaries they do. The good news for anyone who makes a living in the real estate business or in new home construction is that home prices will increase and there looks to be continuing record numbers of new home starts in Canada as we move through Q1 of 2021. The other side of that coin of course is that fewer MLS listings means fewer of those same listings for working realtors in any city or town in Canada.

Our online real estate lead generation system here at Real Estate Leads comes highly recommended for new realtors for this very reason. While established realtors will likely be better at finding new clients, you’ll have this internet marketing tool working for you to even the playing field a bit.

Watch for Springtime

Industry experts say the smart eyes should be on how many existing owners put their homes up for sale come springtime. We’re already seeing record-setting sales, but it’s also known that demand is much stronger than those numbers suggest because prices are being impacted positively. On January 1st there were fewer than 100,000 residential listings on the Canadian MLS, and it hasn’t been that low for more than three decades now. And if we go back to New Years day just 5 years ago there were 250,000 sales listings on the MLS.

How this plays out within record-high demand and record-low supply to start the year. How that plays out in the sales and price data will depend on how many homes become available to buy in the months ahead. Ideally, we’d like for households to be able to find and acquire the homes that best suit their needs and for housing to remain affordable, but the fact is we’re facing a major supply problem in 2021.”

Sales activity was nevertheless robust in Greater Toronto and Vancouver last month, helping set a national record for the month, according to CREA data. Transactions rose by 7.2% last month from November, but the country’s two most expensive markets witnessed monthly gains of 20%.

Moreover, actual sales activity in Canada surged by 47.2% year-over-year in December—an 11-year high—as CREA recorded more than 12,000 transactions in the country. December also marked the sixth consecutive month of year-on-year sales increases.

In 2020, there were 551,392 home sales recorded in Canada’s MLS, which broke the previous record set in 2016 by 2.3%, for a 12.6% increase over 2019. According to Costa Poulopoulos, CREA’s chair, the national housing market will carry the momentum it has built into this year.

However, as Cathcart alluded to, inventory is dwindling. At the beginning of this month, there were only 2.1 months of inventory nationwide, which is an all-time low, and 29 Ontario markets had under a month’s worth of inventory. “While momentum continues into 2021, surging COVID cases and a return to April-like lockdowns in some provinces means we’ll be revisiting some of those virtual technology solutions to process deals in the first few months of the year,” said Poulopoulos. “Hopefully we’ll have the current wave more under control by the time the spring market rolls around, which is shaping up to be a very active one.”

Out west here there’s been plenty made about how the condo market has cooled off big time from where it was a year ago before the onset of the Pandemic. People have all sorts of theories about why that’s happened while the market for detached homes has stayed strong here, but in truth it’s likely that so many of them are investor properties where the investment is becoming less of what it once was and owners are responding accordingly.

Both Vancouver and Toronto have always had their market forces altered by the constant influx of immigrants to the country who are extremely qualified home buyers. That’s a good thing, both for the prosperity of the country with these educated and hardworking people as well as the market with maintaining or increasing property values and being an impetus to higher numbers of new housing builds.

All of this is a part of why there’s no better place than these two dense urban areas to be a real estate agent, and why it’s also possibility the worst place for one to be too. There’s valuable properties to be bought and sold, but there’s so many more realtors like you looking for that same piece of the pie. Which is why our online real estate lead generation system for Canada here at Real Estate Leads is such a good choice to get a leg up on your competitors and have more in the way of qualified buyer clients.

But back to topic here, the earliest part of 2021 here has confirmed what we thought we were seeing in late 2020 – that the Condo market in Toronto is bouncing back somewhat after taking the same type of Covid-related hit that Vancouver’s did and continues to experience.

Making the Comeback

So yes, Greater Toronto Area’s condominium market moderated in 2020, but it appears that was only a temporary reality. From Jan to Dec last year, sales declined by 5% compared to 2019, according to the Toronto Regional Real Estate Board (TRREB). However, prices actually increased by 7.1%. in the metro area and in the suburbs prices rose anywhere from 6.3% and 10.2%.

In addition, December was a month that broke records for the GTA’s condo sector. Sales increased by 75.4% year-over-year while the average condo price dipped down by 2%. In Toronto proper, condo sales roared up by 75.9% during the same period, and the only 4.7% average price decline did little to counter the equation. On the outskirts of the GTA and neighbourhoods there sales shot up 74.5% and the average price increased by 6.3%.

Greater Valuations Too

The condo segment of the GTA’s housing market went through a lot of turbulence last year. Through the first five months of 2020, sales went down by 28.1% compared to the January-May period of 2019. Still, the average price increased by 12.1% and that’s very much something that’s not in line with the fundamental laws of supply and demand. So why the rise in valuations?

The Toronto Real Estate Board explains it with one- and two-bedroom condo rental transactions going down by 30.8% and 26.7% on an annual basis, but that number still be a doubling of what they did a month earlier.

What’s likely happening here is that renters have been taking advantage of slightly lower rental rates. And perhaps putting of first-time homebuyer purchases that they would have made otherwise. But again, by the time we were into December sales were surging again and the condo sector was beginning to look like it should in normal times. The good news is that this shows that the GTA’s market fundamentals are solid and not prone to being fudged or misinterpreted as they might be if it were elsewhere in the country.

Add to this more expensive ground-related homes sold like hotcakes, attesting further that significant number of Torontonians weren’t as hard hit by the pandemic as perhaps originally thought. Which we can likely say is true for the majority of Canadians across the country, and that’s not to make less of the situation of those who haven’t.

However, the economic numbers are in line with those for housing in the two big cities. And that’s a real positive for us that we can lean on when looking at the real estate market in Canada as we inch further into 2021.

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It’s been said that you have to enter every new year with an optimistic outlook, otherwise you’re doing yourself a disservice. That’s something we can certainly believe in, and most realtors will agree that if you’re going to be in business for yourself you really must have a positive attitude and optimistic outlook. Now it’s fair if the current state of the world and the pandemic means unavoidable pessimism for a lot of people, but we’re going in the opposite direction and you’d do well to come along!

We’ve gone on at length about how absurd it was to suggest that house prices in Canada were going to crash as a result of the pandemic’s economic downturn. The way the market stayed resilient throughout the storm said everything that needed to be said, so we’ll leave that there. A health real estate market is one where house prices seen incremental gains, not the massive jumps that people who can’t get into the housing market regularly complain about. And those are legitimate complaints.

Now if we exclude the Toronto and Vancouver areas where supply and demand economics are pretty much exclusively responsible for housing affordability woes, we in fact have seen incremental gains in housing prices across the country as a whole. That’s the way it should be, and everyone – from homeowners to agents to contractors and the national GDP as a whole – have benefitted from the resilience of our housing market in Canada.

It’s still a tough business to make a go in, however, and that’s why our online real estate lead generations system here at Real Estate Leads is as highly advisable ever here in early 2021 for realtors who need to get more out of their client prospecting efforts. Another big plus for any of them is being explicitly in the know about trends in the Canadian housing market, so let’s use the first post of the year on a 2021 Canadian Real Estate Market Forecast.

Apprehensions Washed Away

Just 3 months into 2020 and the term ‘uncertainty’ had never been more appropriate for the state of the housing market in the country. Those concerns were legitimate, as there was an initial freeze on the homebuyer front as people were naturally apprehensive. Some were apprehensive for the magnitude of the situation, and others were waiting to see if home prices actually did fall in the way some doomsday types were predicting they would.

This was what lead to the ‘pent up’ demand, as the expression went. Come around September of 2020 the volume of sales was rebounding, and in large part because people who were qualified buyers before the pandemic and were less exposed to the ill effects of it made the move they were always going to make at some point.

And yes, the fact that some many would-be buyers remained qualified buyers is a testament to how many people had taken care of the finances to the point that they were sufficiently insulated against the pandemic’s economic downturns. Of course, everyone hopes that those who lost their employment because of the pandemic find the opportunity to re-establish themselves and return to being qualified buyers if purchasing a home was on the list for them before March of 2020.

Commercial Real Estate in Canada 2021

For decades now Canadian commercial real estate has been viewed as a relatively safe, low-risk investment. These days though, the economic uncertainty and pandemic-driven safety measures like lockdowns, physical distancing regulations and capacity limits have taken a big bite out of the enthusiasm that has always been seen for this market.

Unfortunately, part of the commercial market has been seeing retail stores close their doors due to forced lockdowns. Lost revenue as well as a growing consumer shift to online option is triggering decreased demand for industrial properties.

However, businesses transitioning to a remote workplace are assessing the future need for physical office space and whether or not a shift to a hybrid or entirely remote setting moving forward might be the better choice. Still others will wait to see how society adjusts in the coming months to make these types of decisions.

Then there’s been the role of the Federal Government’s CECRA program in all of this. It’s been very helpful and will have long term positive effects on the health of the commercial real estate market in Canada.

Other good news points for this market are in the fact that Industrial properties and warehouses will continue to thrive as the surge in e-commerce continues, further fuelling the need for these types of spaces.

Residential Real Estate in Canada 2021

Opposite to the way it is with the commercial real estate landscape, residential real estate has always been especially cyclical and exposed to uncertainties and risk. We can start by saying that these who have plenty of investment properties in Canada aren’t nearly as self assured as the primary residence-only homeowners are. The market could still take a turn for the worse based on the slightest factor, and it’s these types of owners who are already feeling the pinch if they own condos in Vancouver or Toronto.

However, the pandemic has certainly added a new level of uneasiness and tightening in the market and the reality is that the fundamentals for market forces in residential real estate do not change. Major cities with ample employment opportunities will always inherit large populations as Canadians, and despite the increasing prevalence of work-from-home there are always going to be plenty who need to live close to where they work.

There is a mixed positive in this, and one thing that we’ll see as a predominant trend in 2021 is a hotter rural residential real estate market. That also stands to really benefit the economies of smaller towns, and have other bigger-picture advantages for all of humanity.

Another huge factor here is going to be if interest rates stay very low the way they did throughout 2020. While that will benefit economic recovery, it has the potential to be a double-edged sword. But if rates are to rise there will definitely be a rush of people looking to buy homes and secure favourable financing for that purchase.

All in all – things are looking good for people ready to enter or move-up in the housing market in Canada, and that bodes well for realtors like you! If you’d like to put some serious power behind your client prospecting efforts then do like a whole lot of other success-minded realtors have and sign up for Real Estate Leads here. It’s a proven effective way to put Internet Marketing approaches to work for you and put you directly in touch with people in your area who are genuinely ready to make a move in the real estate market. Only one realtor will receive these leads – and that’s you!