• Aggregate price of a home in the Greater Toronto Area forecast to rise 5.75%

• Tech and government sector expansion to drive Ottawa prices up 11.5%
• Canada’s priciest city to experience 9.0% rise as housing demand in Vancouver surges
• Halifax and Greater Montreal prices forecast to rise 7.5% and 6.0%, respectively
• Calgary, Edmonton prices buck regional economic drag, to show modest price growth 

TORONTO, ON, December 14, 2020 – Housing demand exceeded expectations in the second half of 2020. The supply of homes available for sale failed to keep pace, driving home prices higher and pushing unmet buyer demand into the new year. According to the Royal LePage Market Survey Forecast, the aggregate[1] price of a home in Canada is set to rise 5.5 per cent year-over-year to $746,100 in 2021, with the median price of a two-storey detached house and condominium projected to increase 6.0 per cent and 2.25 per cent to $890,100 and $522,700, respectively.[2]

“The leading indicators we analyze are pointing to a market that favours property sellers in the all-important spring of 2021,” said Phil Soper, president and CEO, Royal LePage. “Across the country, a large number of hopeful buyers intent on improving their housing situation were not able to find the home they were looking for this year, as the inventory of properties for sale came nowhere near to meeting surging demand. With policy makers all but promising record low, industry supportive interest rates to continue, we do not see this imbalance improving in the new year. The upward pressure on home prices will continue.

“There was a clear shift towards larger properties and single-family dwellings in 2020, as families repurposed homes to become their office, school classroom, gymnasium and restaurant during the pandemic,” Soper continued. “We expect this trend to moderate as life returns to normal in the months ahead. It is also worth noting, that Canada welcomed a new generation of first-time homeowners this year, encouraged by lower financing costs and softer demand for city centre condominiums. Urban living remains attractive for many.”

The value of single-family houses and homes outside of major urban markets are forecast to continue to outpace city core condominiums in the year ahead, driven both by Canadians seeking larger homes in a time where remote work has become more commonplace, and broad-based demographic trends, including baby-boomer retirement.

“Mega-trends that predate the pandemic are pushing home prices higher in secondary markets outside of our largest cities. Corporate Canada’s pandemic-driven move to work-from-home operations has simply accelerated relocation patterns already underway,” said Soper. “The huge baby-boomer demographic began post-children migration to suburban and recreational-style communities in the middle of the last decade, and material numbers of the equally populous millennial generation have been exiting city centre condos in search of space as they began families.”

Soper added that the trend of high demand outside of urban centres will slowly ease as listings in city centres become more competitive against growing prices in suburban and exurban markets.

Immigration is critical to the housing market both indirectly, as it is supportive of economic growth, as well as directly through housing demand. In October, the federal government announced its plan to add more than 1.2 million immigrants over three years, a significant jump from previous years. Previously published Royal LePage research[3] into this demographic shows that newcomers to Canada typically rent for three years before purchasing, after which they have a material impact on new household formation and overall housing demand. An increase in immigration is supportive of both the resale market and investment demand for rental condominiums.

Nationally, the condominium segment is expected to see healthy demand in most of Canada’s largest cities. A notable exception is the Greater Toronto Area where a softer condominium market began emerging in the second half of 2020. Within the region, modest price gains for larger units outside of the city centre is expected to continue to offset softer demand in the downtown core. With the return of international university student rental demand and newly arrived immigrants in the second half of 2021, demand for centrally located units should increase.

The concern regarding the impact of potential mortgage defaults related to mortgage deferrals during the summer has eased significantly, as many Canadians who deferred payments have begun repayment. According to CMHC, as of September 30, 2020, the organization’s entire insured book of business has 5 per cent of loans with a payment deferral in place; a decline from approximately 8 per cent in August.[4]

“The first half of 2021 will be something of an economic and social tug-o-war between advancing medical science and surging housing demand,” concluded Soper. “The real estate brokerage industry has developed protocols that allow us to safely sell property during the pandemic, yet some would-be sellers will remain cautious and not list their properties while high levels of COVID-19 transmission remain the norm, restricting available housing supply.”

Royal LePage 2021 Market Survey Forecast Price Table:

rlp.ca/rlp2021_forecast_table

MARKET SUMMARIES

Greater Toronto Area 

In the Greater Toronto Area, the aggregate price of a home in 2021 is forecast to increase 5.75 per cent year-over-year to $990,300. During the same period, the median price of a standard two-storey home is expected to rise 7.5 per cent to $1,185,800, while the median price of a condominium is forecast to increase 0.5 per cent to $600,800. The relatively flat median price projection for the condominium segment reflects a modest increase in median price for condominiums in the 905 area, offsetting a slight dip in median price for the City of Toronto.

“Single family homes remain in high demand. We expect lighter activity as we near the winter holidays but if inventory does not improve in early 2021, we could have another year of strong price appreciation,” said Debra Harris, vice president, Royal LePage Real Estate Services Ltd. “Low inventory is expected to put upward pressure on prices but we could see low unit sales if there isn’t product to sell.”

Performance within the condominium segment is expected to remain varied with higher demand for larger units in the 905 area. Harris added that while there has been a recent surge in condominium listings, the historically starved Toronto condo market can withstand an increase in condo supply without significantly impacting price in the short term. With the federal government’s new and aggressive immigration targets as well as the expected return of rental demand from university students in the fall, resale demand for condominiums should be significantly higher in the second half of the year.

“Many young people returned home to save money during the pandemic and we expect them to want to get back into city life when the vaccine becomes available. The question is whether consumer confidence in the condo market will be healthy given the surge in listings. The reality is that current inventory is much healthier than where we were last year,” said Harris. “For the many young professionals who were discouraged by strong competition in the condo market in previous years, this window may be their opportunity to find a home they can get excited about living in.”

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Amid dark times, Toronto real estate remains a bright light in 2021

Insatiable buyers plus limited inventory equals rising prices

Author of the article:

Brynn Lackie

Publishing date:

Jan 10, 2021  •  Last Updated 1 day ago  •  3 minute read

The resilience of Toronto real estate in the face of a global pandemic and all of the subsequent economic fallout has been nothing short of incredible.eland Baldwin poses in just boots on Instagram

Although there’s certainly been no shortage of media attention on the subject — particularly the record-setting sales figures within the Toronto market that have spilled into neighbouring markets and driven the 905, 705 and 519 area codes into uncharted territory — it remains endlessly fascinating to many.

And for good reason….

According to data just released by the Toronto Regional Real Estate Board (TRREB), this past December set a monthly record for sales with a year-over-year increase of 64.5%. That holiday slowdown we have been conditioned to expect? It never happened. In the absence of packed social calendars and holiday gathering fatigue, buyers stayed focused and stayed in the game.

It’s quite simple: insatiable buyers plus limited inventory equals rising prices.

Even during the literally dark days of December, alongside rising case counts and the introduction of further lockdown measures, the demand for freehold houses continued.

The condo market has been another story entirely. Hardest hit by the fallout of COVID-19, this portion of the market has softened over the course of the last nine months. Between the pandemic’s almost immediate decimation of the rental market coupled with the city’s Airbnb ban, investors evidently held on as long as they could before dumping units en masse. September, coinciding with the expiration of the first round of lenders’ mortgage deferral programs, saw the number of new condo listings coming to market more than double.

“The supply of single-family homes remained constrained resulting in strong competition between buyers and double-digit price increases. In contrast, growth in condo listings far outstripped growth in sales. Increased choice for condo buyers ultimately led to more bargaining power and a year-over-year dip in average condo selling prices during the last few months of the year,” said Jason Mercer, TRREB’s chief market analyst.”

But there are signs the resale condo market may be waking back up again.

As has been widely acknowledged, the impacts of the pandemic have been imbalanced. While unemployment has skyrocketed and countless businesses have been forced to close, there are still many who are doing well — if anything, the pandemic has curbed their lifestyle spending and forced savings. This is one of the reasons the real estate market is so strong.

 Between historically low interest rates and nearly a year’s worth of savings, coupled with seismic shifts in where and how people work and live, much has changed in a year.

For people with money to burn, the age-old idea that there’s money to be made in a downturn certainly applies. And that’s what this is — a downturn not a crash. Investors aren’t gone they’re on standby, watching and waiting intently as they attempt to time the bottom of the market.

With optimism on the vaccine front, interest rates likely to hold for the foreseeable future, and a government scaffolding our economy with stimulus, the conditions are right for investors looking to scoop up some deals in anticipation of the recovery. And looking at the December sales figures, an uptick in condo sales in the last week of the month indicates we may be on the up again with prices sure to follow.

Simply put, Toronto will always be Toronto and one day COVID will be behind us, the downtown office towers will be full again and the city will again be a magnet for business, industry and culture. Investors know this.

The wild card here will, of course, be the pandemic itself — with what’s sure to be a dark winter ahead of us, it’s hard to even imagine life on the other side, let alone what an economic recovery will look like.

But even on our darkest days, we can rest assured it’s a when not an if.

— Brynn Lackie is a second generation realtor and life-long resident of Toronto

@brynnlackie

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Charisma Condos

Charisma Condos are preconstruction condos being built at the corner of Jane & Rutherford. These condos are in prime location, close to all amenities, Vaughan Metropolitain Subway Station, Vaughan Mills Mall, Public Transit, Wonderland, Elementary & Highschools, Highway 400 and lot's of restaurants and shops. This makes these buildings the ultimate investment oportunity.

Charisma Condos have a very sleek modern appearance on the outside and have many unit options to choose from. From small to big Charisma Condos have something for everyone. They will be very modern on the inside with premium finishes. These condos are currently under construction and sold out.

Indigo Condos

Indigo is a condo development located in Maple at 99 Eagle Rock Way. This development is a great investment oportunity due to it's astounding location. Right next to the Vaughan GO station, Highway 400, Vaughan Metropolitain Station, Vaughan Mills Shopping Mall, Wonderland and much more.

With high quality interior finishes and spacious balconies, the Indigo Condo building is undeniably elegant and functional. Residents can expect to walk into beautifully designed suites that are roomy, relaxing, plush and irresistible

Courtyards of Maple

The Courtyards of Maple are located on Major Mackenzie Drive just East of Jane Street. As one of the very few low rises in Maple this Condo development is highly saught after. With many suite options and size ranges this condo perfectly suits everyones needs.

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Conclusion

If you are looking to move into the Vaughan area and specifically into a condo, EXPO should be a building you consider. With many high end amenities in the building and it's close proximity to the Vaughan Metropolitain Subway makes it very saught after.