Further that we go, the more we see the true impact of CoronaVirus ( COVID-19) on Toronto’s real estate market. The REAL effect of CoronaVirus on Toronto’s real estate market is still unfolding but is different from what the news headlines were suggesting in the past few months!
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 in this link )
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 full-time and I have seen many market ups and down 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 during the COVID-19 Pandemic?
#Toronto A Different Planet
Toronto Home Prices are up 11.9% Year over Year and up 7.8% Month over Month!!!
It’s big news that Toronto Home prices went up 7.8% in just one month. Many buyers might panic now and many sellers might get happy. Before we start going deep into it let me explain, when in the report you see Sales are Down or Prices are up, none of them should be interpreted individually! Sometimes the number of home sales are up but prices go down! Sometimes it’s vice versa!
First let’s look at Toronto’s Housing Trend in the past four months, from before the Pandemic Starts.
June 2020 has started with a total of 8,701 resale transactions reported through TREB’s MLS in Toronto’s real estate market. That is a 89% 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 by 7.8%, from $863,599 to $930,869. What that means is that Toronto’s market has bounced back. Freehold and specifically detached properties are in the highest demand in Toronto right now.
How CoronaVirus (COVID19) affected Toronto’s Housing Market:
As we talked earlier, the number of real estate transactions was almost similar to last year, but the average Toronto home price is up 11.9% year over year and 7.8% month over month! That tells the market has started to move with its normal pace. Whether we like it or not, it seems the buyers and sellers feel confidence and are back in the market even amid the COVID-19.
The job market in Toronto is stronger than other areas of Canada. In a province like Alberts, the job market 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.
Suburbs are on the surge, as many people started to adapt from working from home and going to the office only a few times in a week. We’d predicted that in our previous blog posts and this is 4 months later and it is already happening in suburbs of GTA.
What will happen to the Toronto real estate market in the near future:
One thing that can be seen is that End users who need a home to live and or raise their families, are already in the market. Some investors are also out there looking for deals! On the other hand the level of standing inventory is shrinking. Those mean more competition and more bidding wars on properties.
That being said, as we had predicted, 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 predict that 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 )!
Remember 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 real estate agent now, if you want to buy or sell any time soon!
General 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 July 2020 with a total active listing of 14,001. This is drastically down from last year’s 19,655 listing’s in the same month. That being said, the Month of Inventory (MOI) Decreased to 1.6 Months of Inventory in all property classes in the Greater Toronto Area’s real estate market.
Just so you know, 1.6 MOI is considered a seller’s market! So buyers out there, beware of that!
Toronto Home Prices’ Annual Trend (11.9% Up)!
Now if we compare the Annual Trends, we’ll see that the average Toronto home price is still up from last year, by 11.9%. July 2020 has started with a total of 8,701 resale transactions recorded till the end of June with average sold price of $930,869. That is ONLY a -1.4% Decrease in the number of sales BUT +11.9% Increase in Home Prices compared to last year similar time in Toronto’s real estate.
What that means is although the number of transactions have almost been the same as similar time last year, not only the prices haven’t dropped, they have moved up drastically. That’s Toronto’s average by the way, we’ll review different property types to see which ones had gains and which ones lost in the Coronavirus Pandemic market!
Toronto’s Condo Market (Condo prices UP 7% YoY):
Toronto’s Condo Real Estate Agents finished the month with 1,793 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 16% compared to last year amid CoronaVirus (COVID-19). BUT, the average price of a condo apartment in Toronto went UP by 7% to $631,704 compared to the year before.
Toronto’s Detached Houses (Detached house prices are UP 10.8% !) :
Detached is back. Very Strong!
Toronto’s REALTORsⓇ sold 2,285 detached houses through TREB this past month. The average price of a Detached house in Toronto’s $1,127,419. This is a 10.8% increase in Detached Home prices in Toronto.
Month of inventory is a good indicator that shows the OVERALL supply/demand situation in each area. It has been 1.6 MOI for detached homes in Toronto’s housing market. This means the Detached Market has been a 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 on most of the listed detached homes ( Especially under $1.5M price tag).
Semi-detached and Townhouses:
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 month in Toronto! One of the reasons is that they are usually in the 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 contact us!
Comments and Predictions for home sellers, July 2020:
Each micro market in Toronto could have different behaviour, but the general trend is almost the same in the city of Toronto. Our real estate market report is one of the most credible 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.
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.
So 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, July 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 huge 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 us you know that we had predicted 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 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!