Amid dark times, Toronto real estate remains a bright light in 2021
Insatiable buyers plus limited inventory equals rising prices
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Jan 10, 2021 • Last Updated 1 day ago • 3 minute read
We may only be one week into 2021, but on the real estate front the new year is off and running.
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
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