You might have seen all kinds of news headlines about Toronto’s real estate market in the past few months, here you’ll find the most comprehensive monthly report about the Toronto real estate market’s Macro picture. 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 are very close to what is happening right now on: Toronto’s Real Estate Market )
If you are a Torontonian Home Owner or Buyer, your main question might be: 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 and investing in real estate in Toronto through the ups and downs of the market. My team’s approach to real estate market analysis is based on macro fundamental analysis combined with our micro and local analysis. Our Micro analysis of Toronto’s neighbourhoods are based on being active in buying and selling on a day to day basis in Toronto’s market. 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.
In this article, following Toronto’s real estate market’s analysis, we’ll discuss how Toronto’s housing market might act in the future (our predictions), and what outcomes home buyers and sellers might face. And then we’ll review whether this is a good time to buy or real estate?
Toronto Home Prices are up 14% Year over Year
It’s big news that Toronto Home prices went up 14% whie many people are expecting the Second wave. Many buyers might panic now and many sellers might get happy. BUT that’s not the case for all Toronto and every property class. So if you are a potential seller, don’t be too happy, and if you are a potential buyer, Don’t Panic! I’ll explain why in a bit!
Let’s look at Toronto’s Housing Trend in the past few months, from when the Pandemic Started.
October 2020 has started with a total of 11,083 resale transactions reported through TREB’s MLS in Toronto’s real estate market. That is a 42.3% INCREASE in the number of sales (Month over Month ) compared to the year before. But it’s only 6.7% increase in the number of sales from a month ago! What does that say to you?
One of the indications that I get is that the market’s activity in September followed by August 2020, were abnormal. That means the number of sales in those two months were basically the pent up demand from the first few months of the spring. Literally we had a late spring market in Toronto.
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 $951,404 in August to $960,772 in September. That means Toronto’s market is going forward strong.
But the more interesting price increase is the annual Year over Year price increase. Last year at the same time the average price of a home in Toronto was $842,421 , and this year it is $960,772 , this is a 14% increase year over year, which is a very rare phenomenon in a September market ( with a couple times exception since 1996 )! That also strengthens my idea about Toronto’s late spring market happening right now.
A late spring market also means that we’re gonna see a few slower months in and or around the end of fall and beginning of the winter. My prediction is December, January and February would be the slower months. 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!
If you remember from my Toronto real estate market analysis you’d read when’s the best time to buy a home in Toronto. There you can see that Toronto’s seasonal markets are usually slower in January and February. So I predict that the winter market would be a little bit slower than the last winter and you might even see price decreases.
However I had predicted this rapid growth in the market from over 6 months ago, the Rebound would be much quicker than the plunge. You can read my predictions in the April and or May’s Toronto real estate market analysis. However, I still think that there would be ups and downs till we reach a balanced market,which stays here for a while!
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!
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 October 2020 with a total active listing of 11,083. This is drastically UP from last year’s 7,791 listings in the same month. That being said, the Month of Inventory (MOI) Increase 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! BUT it’s not for every area, some in some areas we have buyers’ markets. Contact us for more information.
Toronto Home Prices’ Annual Trend (14% Up)!
Now if we compare the Annual Trends, we’ll see that the average Toronto home price is up from last year, by 14%. September 2020 has started with a total of 11,081 resale transactions recorded till the end ofSeptember with average sold price of $960,772. That is +14% 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 6.6% YoY):
Toronto’s Real Estate Agents wrapped up the month with 2,367 condo apartment sales in the past month through the Toronto Real Estate Board MLS system.
Number of condo apartment sales in Toronto increased by approximately 14.6% compared to last year. And, the average price of a condo apartment in Toronto went UP by almost 6.6% , $634,756 compared to the year before.
But beware, don’t let this number trick you. I see increasing levels of inventory in the condo market especially in Downtown. So if you are a buyer looking for a condo in Downtown, this is a good time to go and shop around and have multiple options without the fear of facing multiple offers like a few months back.
Downtown Toronto’s Month of inventory is 4.85 MOI which is almost a buyers market. So this is good news for buyers who are looking for a condo in Downtown Toronto, they can have lots of options! But don’t get too happy if you are a Condo buyer in downtown, because we have seen the sellers resisting the price drops in some instances, and it depends on the case by case. So I highly recommend contacting a Top Toronto real estate Agent who covers Downtown Toronto and knows that market in and out if you are looking to make a move there.
Toronto’s Detached Houses (Detached house prices are UP 16% !)
Detached is going Strong!
Toronto’s REALTORsⓇ sold 5,559 detached houses through TREB this past month. The average price of a Detached house in Toronto’s $1,184,700. This is a HUGE 13% increase in Detached Home prices in Toronto. FYI the Average Detached Home Price in the City of Toronto is $1,487,000!
Month of inventory is a good indicator that shows the OVERALL supply/demand situation in each area. MOI has been 1.4 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 10.6% and Townhouse Prices are Up 10.5% 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-high end of the freehold market!
The average price of a Townhouse in Toronto has been $748,437 and the average price of a semi-detached house in Toronto has been $922,269! For more detailed info about these property classes and their respective markets, you can talk to a Top Toronto Real Estate Agent!
As a reminder, all the predictions, comments, and analysis in this post or any other blogs on TOrealestateagent.com are for informational purposes only and might change from time to time, and shall not be construed as any kind of advice, and it doesn’t create any client solicitor relationship whatsoever. Before making any decisions, whether real estate related or investmentment related, you must consult with your accountant, and your own realtor and any other relevant professionals.
Important Comments and predictions for home sellers, October 2020:
In general, if you are a seller, you might find the next few months better than the past couple of months ( unless you are a condo seller in Downtown ). 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. However as I mentioned earlier, I see the market in the winter months ( End of Nov beginning of Dec ) starting to slow down and in some areas might see negative growth.
Each micro market in Toronto could have a different behaviour though. 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 the COVID19.
Important Comments and predictions for home buyers, October 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!
But if you are a buyer looking for condos downtown, you can find good deals! In downtown the market is becoming a Buyer’s market, but I see that it won’t last forever, as you start seeing more good news regarding the COVID , the more confident people will become to go to the offices. Also the government is planning to make it easier for tourists and foreign students and immigrants to come to Canada which will drive the downtown market again. So right now there is a good window of opportunity for those who are looking for a deal in downtown Toronto. Once they open the doors to the above, the market will start shifting in downtown as well. Of course no one can tell for sure when that will happen!
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 5-6 months ago).
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