One of the nicknames Toronto has is the ‘Big Smoke’. If the numbers for real estate in January are any indication then it would appear apt, as it seems the fire of demand for real estate that closed out last year is burning even stronger to start 2021. Vancouver and Toronto have long been the hottest markets in Canada for obvious reasons, but one of the things that Toronto has had going for it that Vancouver hasn’t is the ability to grow outwards.
However, now it’s become a situation where even that isn’t the mediating factor it used to be. So what’s being seen is that Toronto is having the same acute supply-demand disparity that Vancouver has had pretty much forever. All of this of course added to by constant inflows of people, although not as many last year as year’s previous for obvious reasons.
The surge in the real estate market in Toronto is of course good for realtors, as well as anyone else who’s livelihood is related to the market or any of the many other industries connected to it. If you’re a realtor working there, however, all that benefit is somewhat offset by the fact that the number of people competing for that same slice of the pie makes your profession even more competitive. That’s why our online real estate lead generation system here at Real Estate Leads is such a smart choice for realtors who want every advantage they can get.
But back to topic, it’s a great time to be a homeowner with your property on the market in Toronto.
Condos Leading the Way
The condo market lead the way as Toronto home sales jumped 52.4% year-over-year in January, with 6,928 homes coming to have new owners according to the Toronto Residential Real Estate Board. The average selling price for all homes sold in the region in January also went up 15.5% to $967,885.
All of this went along with activity in the condo market nearly doubling from this exact time last year, going up 85.5%. Countering that enthusiasm somewhat, however, might be the fact that average selling prices fell 4.7% for January. Sales growth in that category IS outstripping listings growth, however, and that usually suggest an incoming price rebound.
Another factor that’s not mentioned there but could be contributing to lower selling prices is owners who see this as the perfect time to move out of the city being willing to accept slightly lower bids on their homes. Unlikely to happen in most cases, but there could be some of that at play here.
Detached Home Prices Surge Ahead on their Own
Looking now at detached homes, there was no slowing down with sales and prices here. Sales volumes rose nearly 35% and average prices were up around 31% year-over-year in January. The detached segment has proven extremely resilient during the pandemic. The reason for that is the same as in any other major metro area. There is no shortage of city-dwellers who are in search of space and more backyard space to accommodate their families in a time when staying home is what’s on the slate most of the time
One thing that should be mentioned here is that even though the rise in demand and impact of rock-bottom interest rates has definitely helped fuel the boom in prices, these rapid rises have some in the industry concerned that about the growth being unsustainable.
More specifically, the concern is that policymakers have been overstimulating the market as a means of keeping the general economy buoyed during these challenging economic times. That’s perfectly understandable, but nearly any economist will tell you there has to be a balance no matter the scenario. Overly high growth rates that have risen dramatically over short periods of time rarely ever work out as well as certain people would hope they would.
Double-Digit Growth for Immediate Future
The resiliency of the real estate markets in Canada’ big cities continues as strong as ever, and the TRREB is expecting to see double-digit price growth continue for the immediate future. Plus, economic resurgence post-vaccine and supportive demographic trends are probably going to push prices even higher. In line with that belief the board is expecting average home prices to get up and past the $1-million mark for the first time ever sometime this year.
Is that full of promise if you’re a realtor working in Toronto? You’re darn right it is, but keep in mind it’s going to be appealing for exactly the same reason for many people who are just like you.
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