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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