What Does the Toronto Market Have in Store for 2021

This article was written by Aaron Broverman from torontostoreys.com.

Nikki Hessami is all about the numbers.

The sales representative for Home Leader Realty Inc. isn’t hanging her trust on opinion or a point-of-view, only what the market data is telling her. She chooses not to operate in grey areas or places of ambiguity; if the data doesn’t support it, she doesn’t present it as fact.

These values are a refreshing change in a world where fake news runs rampant and the usual prognosticators and so-called experts can often be found talking out of both sides of their mouth. This is why Hessami — a new, fresh-faced presence in the Toronto real estate scene who lets the evidence speak for itself – is the perfect person to answer this week’s question.

What do you think is in store for the Toronto real estate market in 2021?

Nobody is a fortune teller. Nobody has a crystal ball. However, I am a person who has looked at the market data and the numbers because people can say whatever they want, but these numbers never lie.

I always monitor the Toronto market analysis that comes out every month and recently it has shown that even during the pandemic and even during the lockdowns, the market in Toronto has proven to be very resilient. For example, in October 2020 compared to October 2019 the Toronto market appreciated by 25% in terms of total residential transactions. That’s a big number, and it’s very surprising.

Obviously, the lifestyle of Torontonians has changed during the pandemic. Lots of people want to move to the suburban areas of the GTA because they’re working from home, they’re locked down and they need more space (and bigger spaces). As so many people want to change locations right now, we’re seeing the housing market appreciate a lot in recent months. This is especially true in suburban areas. I have a client right now who’s looking to buy a detached house in Barrie for the simple reason that he can’t afford to buy in Toronto. Typically, for detached homes in Barrie right now, it’s not uncommon to receive 20 to 30 offers on one property with bids ranging from $70,000 to $120,000 over asking.

In comparison with houses, the Toronto condo market isn’t as hot, but total condo apartment sales have gone up 10.5 percent year-over-year and the average price for condos in the third quarter of 2020 was up 8.3% over the third quarter of 2019.

Meanwhile, the Federal Government of Canada has set an immigration target of 400,000 people for each of the next three years. This could mean up to 1.2 million new immigrants in just the next 36 months, and 34% of them will be coming to Toronto. This level of immigration shows us that over the next three years demand for housing will still be very high. In just the last year alone, from October 2019 to October 2020, the average selling price of a GTA home as risen to $968,000 (+13.7%).

All the above data clearly shows that home prices, selling prices, and demand will continue to go up in the Toronto market in 2021.

Overall, Toronto real estate prices will be going up for years. The market may experience temporary fluctuations in that trajectory, but real estate is a long-term investment and, in the long-run, home prices in Toronto will go higher and higher and never stop in this city.

In 2008, the average home price was only $379,000, in 2019, the average home price was $851,000 and in 2020 it’s $958,000. Every ten years, real estate in Toronto booms and it has been going up over these past 10 years because of immigration, attractive jobs, and the fact that Toronto is a world class city akin to London, Tokyo, New York, or Paris. Big companies like Google are in Toronto and lots of people want to be close to these places for employment. Bottom line, the Toronto real estate market will stay strong and become even stronger in 2021.

I also believe a lack of housing supply hitting the market will continue to challenge home buyers and put upward pressure on prices in 2021. Concurrently, interest rates will remain low for the next few years and property taxes will stay the same for 2021. Support for the real estate market from the Canadian government will continue to play a role as well. Developers are getting great incentives from the feds to keep building and that keeps the market very high as well.

Obviously, I’m pretty positive about the Toronto real estate market and my advice would be to take advantage of where prices are now because once the pandemic ends, lots of people with money will come back to the market and prices will go through the roof. Now, is the best time to use the pandemic as an opportunity because Toronto real estate is never going to be cheaper.

This interview has been shortened for both clarity and length.

Please note: The opinions in this article are those of the interviewee and not those of Toronto Storeys. When considering real estate advice speak with your own agent and lawyer.

 

Source: torontostoreys.com

Will Canadian Real Estate Prices Flourish this Winter?

The temperature outside might be dropping, but the housing market across Canada is still hot, hot, hot!

From coast to coast, the real estate industry continues to set new records with quick inventory turnover and rising prices due to high demand that is fuelled, at least in part, by low interest rates.

But will this upward trend continue through winter? The data looks promising as we near the end of 2020 and look forward to what 2021 has in store.

What can we expect from the market this winter?

The upward trend is set to continue (and Canada is leading the way)

A report published by the Federal Reserve Bank of Dallas looked at the real estate markets across the G7 countries (Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States) and the results make for very interesting reading. They found that Canadian real estate prices had experienced the most significant jump, rising nearly 2.5% from the previous quarter.

Across the country, home valuations have increased, and sales have grown year-on-year. The most notable growth was in:

  • Greater Toronto Area: $890,400 (+11.1%)
  • Greater Vancouver Area: $1,038,700 (+5.3%)
  • Ottawa: $517,800 (+19.9%)
  • Greater Montreal Area: $408,200 (+16.4%)
  • Halifax: $372,982 (+18.1%)

Inventory levels will remain at an all-time low. According to the Canadian Real Estate Association, inventory levels continue to remain at an all-time low. As of August, they estimated that it would take only 2.6 months to liquidate all the current listings as the current sales rate.

What factors make real estate investment in Ontario so attractive?

There are several growth factors that work in favour of the country’s real estate market, including:

  • Interest rates that are the lowest they have ever been and this is likely to stay the same for the next few years,
  • Low inventory and pent-up demand that continues to fuel growth,
  • Property tax will remain the same for 2021, and
  • Support from the Canadian government for the real estate industry.

Where should you buy property in Canada?

The Greater Toronto Area has the best long-term growth potential, and there are a number of exciting opportunities both for new homeowners and investors. Whether you are looking for a pre-construction condo in the Entertainment District, a spectacular penthouse with stunning views of Lake Ontario or a house to build a home for your family, it can help to speak to a wealth strategist. And for sellers, the next six months to a year are going to be big. If you’re looking at listing your home this is the most opportune time to plan to sell with 2021 shaping up to be a record year for sales and bidding wars. Nikki Hessami, with her years of experience in the Canadian real estate market and an uncompromising commitment to her clients, makes her the go-to person for real estate in Toronto.