You might have seen all kinds of news headlines about Toronto’s real estate market in the past few months, many were predicting a crash or something negative, which were not accurate. In this article I’m gonna tell you WHY things are happening the way they are happening right now and how the market most likely could continue to unfold! ( you can view our past predictions, which is very close to what is happening right now on: Toronto’s Real Estate Market )
But the question is: What will happen to the Toronto’s Real Estate market moving forward with COVID-19 Pandemic?
Toronto’s Real Estate Market
I’m a Toronto real estate agent who has been analysing, selling, and buying real estate in Toronto and I have seen many market ups and downs here in Toronto. My team’s approach to real estate market analysis is based on macro fundamental analysis combined with our micro and local analysis. Our approach to real estate market analysis has made our market reports one of the most credible sources for Toronto’s real estate market news.
After analysing Toronto’s real estate market, we’ll discuss how Toronto’s housing market might act in the future ( predictions), and what outcomes home buyers and sellers might face. And then we’ll talk about whether this is a good time to buy or real estate?
Toronto Home Prices are up 17% Year over Year
It’s big news that Toronto Home prices went up 17% in just one month. Many buyers might panic now and many sellers might get happy.
Let’s look at Toronto’s Housing Trend in the past few months, from when the Pandemic Started.
August 2020 has started with a total of 11,081 resale transactions reported through TREB’s MLS in Toronto’s real estate market. That is a 88% INCREASE in the number of sales (Month over Month ) compared to the month before. Interestingly the number of sales wasn’t the only indicator that went up month over month. The average Toronto home price also went up from $930,869 to $943,710. That means Toronto’s market has bounced back STRONG. Freehold and specifically detached properties are in the highest demand in Toronto right now.
What will happen to the Toronto real estate market in the near future:
The job market in Toronto is stronger than other areas of Canada. In a province like Alberta, the overall employment is very dependent on Oil, whereas in GTA we are mostly service based. So the national job market stats may not come into the play when you merely look at the Greater Toronto Area.
A big number of buyers that we are dealing with in Toronto’s real estate market on a daily basis are End users, those who need a home to live and or raise their families, are already in the market shopping for a home. Some investors are also out there looking for deals! On the other hand the level of standing inventory is shrinking. All these translate to more competition and more bidding wars on remaining properties. We’ve been saying that for the past couple of months. Proof: Detached Market is up 25% year over year!!!
That being said, as we had predicted in our previous posts ( you can view our past predictions at Toronto’s Real Estate Market ), the rebound would be very quick, as people will at some point realize that the real estate will go up again, so they will panic, this time not from the virus, but from missing out. The FOMO will get back to the market.
And I had predicted that from 4 months ago, the Rebound would be much quicker than the plunge. However, I still think that there would be ups and downs till we reach a balanced market ( if not a sellers market, AGAIN )!
I’ve said that before to many buyers and sellers, that the time that takes for a buyer to enter the market is faster than a seller prepares and puts a house on the market. So when those buyers who’re on the sidelines now, enter the market, the demand would be higher than the then inventory. And that’s what will cause multiple offers and drive the prices UP!
I strongly recommend that you set a strategy with your Toronto real estate agent now, if you are planning to buy or sell any time soon!
Read More : How to Win Multiple Offers?
Supply and Demand levels in Toronto’s real estate market ( SELLER’S MARKET):
Active listings and Month of Inventory, are other indicators to keep an eye on. We started Aug 2020 with a total active listing of 15,081. This is drastically down from last year’s 17,938 listings in the same month. That being said, the Month of Inventory (MOI) Decreased to 1.36 Months of Inventory in all property classes in the Greater Toronto Area’s real estate market.
Just so you know, 1.36 MOI is considered a seller’s market! So buyers out there, beware of that!
Toronto Home Prices’ Annual Trend (17% Up)!
Now if we compare the Annual Trends, we’ll see that the average Toronto home price is up from last year, by 16.9%. August 2020 has started with a total of 11,081 resale transactions recorded till the end of July with average sold price of $943,710. That is +11.9% Increase in Home Prices compared to last year in similar time in Toronto’s real estate.
That’s Toronto’s average by the way, we’ll review different property types to see what has happened to each property class in Toronto!
Toronto’s Condo Market (Condo prices UP 8% YoY):
Toronto’s Real Estate Agents wrapped up the month with 2,423 condo apartment sales in the past month through the Toronto Real Estate Board MLS system.
Number of condo apartment sales in Toronto fell by approximately 7% compared to last year amid CoronaVirus (COVID-19). And, the average price of a condo apartment in Toronto went UP by almost 8% , $635,778 compared to the year before.
Toronto’s Detached Houses (Detached house prices are UP 16% !) :
Detached is back. Very Strong!
Toronto’s REALTORsⓇ sold 5,633 detached houses through TREB this past month. The average price of a Detached house in Toronto’s $1,154,356. This is a HUGE 16% increase in Detached Home prices in Toronto. FYI the Average Detached Home Price in the City of Toronto is $1,154,356 which is a whopping 25.5% UP!
Month of inventory is a good indicator that shows the OVERALL supply/demand situation in each area. MOI has been 1.3 for detached homes in Toronto’s housing market. This means the Detached Market has been a tight Seller market! Again, this might not be the case in every neighbourhood and or every price range, but what I and my colleagues are experiencing in the detached market in Toronto, is multiple offers non stop on most of the listed detached homes ( Especially under $1.5M price tag).
Semi-detached Prices are Up 16.1% and Townhouse Prices are Up 11.1% YoY:
In the Semi-Detached homes market in Toronto we had a competitive market. Basically Semis were the property types that had very high gains in the past few months in Toronto! One of the reasons is that they are usually in the mid-lower end of the freehold market!
The average price of a Townhouse in Toronto has been $729,045 and the average price of a semi-detached house in Toronto has been $929,138! For more detailed info about these property classes and their respective markets, you can talk to a Toronto Real Estate Agent!
Comments and Predictions for home sellers, August 2020:
In general, if you are a seller, you might find the next few months better than the past couple of months. The market seems to continue to grow and bounce back. In many sectors of the Toronto real estate market, we can expect a slight sellers real estate market, and in some others, a high sellers market.
Each micro market in Toronto could have a different behaviour, but the general trend is almost the same in the city of Toronto. This real estate market report is one of the most thorough reports about the overall market in the Greater Toronto Area. If you want to know about your specific neighbourhood, you still need to look at the stats in your own micro market. For more information you can talk to your real estate agent or if you don’t have any, find a Top Toronto real estate agent in your area.
If you need to sell, or you must sell to move, do it with all the health and safety precautions regarding COVID19.
Is it a good time to buy? Comments for home buyers, August 2020:
In the past month, many of our buyer clients became active as they feel more confident about their jobs and financial security. Thus the demand is getting back to the market, and the demand is really what drives the market.
So if you need to move, or you must buy a home in Toronto, you must brace yourself for some competition with other buyers that have come to the market already!
You need to have your financing in order before entering the market right now, as you might face quite competition ( depending on the property class and location)! If you are looking for a detached, you’ll face more competition than a condo apartment! Getting a consultation or help from a Toronto real estate agent would help you to overcome many of those obstacles easier.
The Novel CoronaVirus ( COVID19) had some impacts on Toronto’s real estate market, whether we like it or not. However it’s important to be ready for that and what will come next. We have been preparing for this and working on new strategies for our clients to guide them with their real estate needs amid these uncertain times ( with a look at the history, you can predict some of the future outcomes).
If you’re following me you know that I had predicted what is happening in the market ( in our reports 4-5 months ago) that those who were waiting for the good days to come to buy a property, would flood the market. And then the listings will fly off the shelves and multiple offers would begin because the demand would be higher than the supply. Result: rapid increase in prices! So you need to talk to your agents and brokers to be ready for that scenario before rushing out to do anything!
Stay healthy! And don’t forget the Physical Distancing!